Q3 Earnings Preview for Ameriprise Financial (NYSE:AMP)

in EARNINGS/INVESTING IDEAS by

Ameriprise Financial, Inc. (NYSE:AMP) is scheduled to report Q3 earnings results after markets close for trading on October 28, 2020.

The company is expected to report earnings of $1.23/share on revenue of $3.011 billion. The consensus earnings per share (EPS) of $1.23/share is based on a poll of 10 analysts and represents a decline in eps of −70.1% over the same quarter last year, when the company reported earnings of $4.12/share.

The revenue forecast of $3.011 billion based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −8.8%. Last year the company reported $3.3 billion in revenue for the quarter.

Expected to report EPS contraction of −70.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,010.87 $3,300.00 −8.8%
EPS $1.23 $4.12 −70.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from Ameriprise Financial, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $2.53 $2.64 4.4% Beat
Q1, 2020 $3.93 $5.41 37.5% Beat
Q4, 2019 $4.26 $4.20 −1.5% Missed
Q3, 2019 $4.09 $4.12 0.7% Beat
Q2, 2019 $4.05 $4.06 0.3% Beat
Q1, 2019 $3.66 $3.75 2.5% Beat
Q4, 2018 $3.59 $3.80 5.8% Beat
Q3, 2018 $3.68 $3.74 1.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $154.05 $152.04 −1.3% Decline
May 6, 2020 $110.73 $121.73 9.9% Increase
January 29, 2020 $165.12 $170.51 3.3% Increase
October 23, 2019 $142.45 $149.63 5.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.75, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.75 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Ameriprise Financial, Inc. is currently trading at $165.61/share, down −2.8% for the day. The company is trading at approximately 91.6% of its 52-week high of $180.85/share. The company’s stock price is up 8.9% since the last earnings report and down −1.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 53.35 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:AMP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 7.96 and a forward P/E multiple of 11.69.

Ameriprise Financial, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.06. The following table summarizes some other key fundamental ratios:

Data as of October 26, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $165.61
P/E Ratio 8.0x
P/E Ratio (Fwd) 11.7x
PEG Ratio 0.2
Total Debt / Total Capital 21.3%
Levered Free Cash Flow $5.754 billion
EV / EBITDA −5.4x

Finbox

Ameriprise Financial, Inc. is a large-cap stock with a market capitalization of $19.918 billion and a total enterprise value of $16.739 billion. The company operates in the Financials sector and the Capital Markets industry.

Ameriprise Financial, Inc., through its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through five segments: Advice & Wealth Management, Asset Management, Annuities, Protection, and Corporate & Other. The Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage services primarily to retail clients through its advisors. The Asset Management segment offers investment management, advice, and investment products to retail, high net worth, and institutional clients through unaffiliated third party financial institutions and institutional sales force. Its products also include U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds, variable product funds underlying insurance, and annuity separate accounts; and institutional asset management products, such as traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds, and property funds. The Annuities segment provides variable and fixed annuity products to individual clients through affiliated and unaffiliated advisors, and financial institutions. The Protection segment offers variable and fixed annuity products to address the protection and risk management needs of retail clients, including life and disability income insurance. The Corporate & Other segment consist of long term care business, net investment income or loss on corporate level assets. The company was formerly known as American Express Financial Corporation and changed its name to Ameriprise Financial, Inc. in September 2005. Ameriprise Financial, Inc. was founded in 1894 and is headquartered in Minneapolis, Minnesota.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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