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Investment Managers Q2 Earnings Slated on Jul 25: AMP, TROW

Investment management (part of the broader Finance sector) industry performed reasonably well over the past several quarters. This time as well, the industry is expected to report decent results.

As the equity market volatility remained low, increase in equity-based assets is expected. While the S&P 500 Index gained 3.1% in the quarter, it underperformed both non-U.S. developed and emerging markets. Hence, asset managers with global presence are expected to record a rise in equity asset under management (AUM).

Further, rising interest rates are expected to lead to decline in fee waivers. Also, demand for alternative investment sources might have aided revenue growth for the investment managers. However, rise in operating expenses, as they aggressively market their products, is expected to slightly hurt the bottom line.

Notably, per the Earnings Preview, overall earnings growth for the Investment managers in second-quarter 2017 is expected to be 6.9%.

So, this is the right time to add a few investment management stocks in case they beat earnings estimates.

Our quantitative model offers some insights into stocks that are about to report their earnings. Per the model, in order to be confident of an earnings beat, a stock needs to have the right combination of the two key ingredients – a positive Earnings ESP and a favorable Zacks Rank – Zacks Rank #3 (Hold) or better. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

So far, handful for asset managers including The Blackstone Group L.P. BX and BlackRock, Inc. BLK has come out with their second-quarter results and their performance hasn’t been impressive.

Hence, let’s check how the two investment management stocks that are scheduled to report earnings tomorrow are expected to perform.

Ameriprise Financial, Inc. AMP is slated to announce results after the market closes. We can’t conclusively predict an earnings beat this time as the company does not have the right combination.

It is expected to witness an increase in performance fees and interest income. However, expenses are expected to rise due to continued hiring of experienced workforce. (Read More: Will Ameriprise be Able to Beat Q2 Earnings Estimates?)

Notably, this Zacks Rank #3 stock surpassed the Zacks Consensus Estimate in two of the trailing four quarters, as reflected in the chart below:

T. Rowe Price Group, Inc. TROW is scheduled to report results before the opening bell. The chances of the stock beating the Zacks Consensus Estimate this time are high as it has the right combination of two main ingredients.

The company is projected to witness a rise in AUM and lower fee waivers. However, mounting expense is likely to be an undermining factor. (Read more: T. Rowe Price to Post Q2 Earnings: A Beat in Store?)

Nevertheless, this Zacks Rank #2 (Buy) stock doesn’t have a decent surprise history, having beaten the Zacks Consensus Estimate only once in the trailing four quarters, as depicted in the chart below:

Check later our full write-up on earnings releases of these stocks.

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T. Rowe Price Group, Inc. (TROW): Free Stock Analysis Report
 
AMERIPRISE FINANCIAL SERVICES, INC. (AMP): Free Stock Analysis Report
 
The Blackstone Group L.P. (BX): Free Stock Analysis Report
 
BlackRock, Inc. (BLK): Free Stock Analysis Report
 
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