Ameriprise Financial (AMP, Financial) reported its first-quarter revenue at $4.35 billion, slightly below the market's consensus estimate of $4.41 billion. Despite the revenue shortfall, the company expressed confidence in its overall performance and strategic positioning.
Ameriprise emphasized its robust client relationships and advice-driven value proposition as key factors in navigating the current market environment. The firm underlined its capability to adapt to evolving market dynamics while maintaining client objectives on track.
The company showcased its diversified business model as a significant contributor to its ongoing strong financial results. It also highlighted the importance of maintaining disciplined expense management, which continues to provide financial benefits.
Ameriprise mentioned its strong balance sheet as a distinguishing factor and cited its consistent free cash flow generation and substantial liquidity as advantages. These elements enable the company to invest in growth initiatives, return capital to shareholders attractively, and seize opportunities through varying market cycles.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Ameriprise Financial Inc (AMP, Financial) is $536.20 with a high estimate of $602.00 and a low estimate of $428.00. The average target implies an upside of 13.64% from the current price of $471.85. More detailed estimate data can be found on the Ameriprise Financial Inc (AMP) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Ameriprise Financial Inc's (AMP, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Ameriprise Financial Inc (AMP, Financial) in one year is $476.46, suggesting a upside of 0.98% from the current price of $471.85. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Ameriprise Financial Inc (AMP) Summary page.
AMP Key Business Developments
Release Date: January 30, 2025
- Total Revenue: $4.5 billion, up 13%.
- Earnings: $965 million, up 18%.
- Earnings Per Diluted Share: $9.54, up 23%.
- Return on Equity (ROE): 52.7%, up from 49.7% a year ago.
- Assets Under Management, Administration, and Advisement: $1.5 trillion, up 10%.
- Total Client Assets: $1 trillion, up 14%.
- Total Client Inflows: $11.3 billion.
- Wrap Assets Under Management: $574 billion, up 18%.
- Wrap Flows: $11 billion, up 59%.
- Transactional Activity: Up 17% from a year ago.
- Adviser Productivity: Up 13% to over $1 million per adviser.
- Bank Balances: Over $23 billion.
- Variable Annuity Sales: Up 15% for the quarter.
- Life and Health Sales: Up 26%.
- Net Inflows in Asset Management: $1.3 billion.
- Retail Net Inflows: $6.1 billion.
- Institutional Net Outflows: $3.9 billion.
- Free Cash Flow Generation: 90%.
- Capital Returned to Shareholders: $768 million for the quarter, $2.8 billion for the year.
- Share Count Reduction: 22% over the last five years.
- Adjusted Operating Margin: 27%.
- Adjusted Operating Net Revenues in Wealth Management: $2.8 billion, up 18%.
- Adjusted Operating Earnings in Wealth Management: $823 million, up 18%.
- Adjusted Operating Earnings in Asset Management: $251 million, up 29%.
- Adjusted Operating Earnings in Retirement & Protection Solutions: $213 million, up 5%.
- Protection Sales: Up 26% to $91 million.
- Variable Annuity Sales: $1.2 billion, up 15%.
- Excess Capital: $2 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ameriprise Financial Inc (AMP, Financial) achieved a record high return on equity of 52.7%, up from 49.7% a year ago.
- Total revenues increased by 13% to $4.5 billion, driven by strong asset growth and transactional activity.
- Client assets grew to $1 trillion, marking a 14% increase, with wrap assets under management up 18% to $574 billion.
- The company attracted 91 experienced productive advisers in the fourth quarter, enhancing its recruiting efforts.
- Ameriprise Financial Inc (AMP) returned $768 million to shareholders in the quarter and $2.8 billion for the year, demonstrating strong capital return strategy.
Negative Points
- Net interest income (NII) at the bank was down sequentially and year-over-year, raising concerns about future performance.
- Institutional net outflows of $3.9 billion were reported, reflecting challenges in the institutional segment.
- The market for acquisitions is currently considered pricey, limiting Ameriprise Financial Inc (AMP)'s ability to pursue inorganic growth opportunities.
- The Asset Management business is under pressure, with a need to transform and become more efficient to improve flow rates.
- Corporate expenses, including severance and technology transformation costs, are expected to impact the first half of 2025.
