Yahoo Finance Ameriprise Financial, Inc. Just Beat Revenue Estimates By 5.5%
Ameriprise Financial, Inc. (NYSE:AMP) came out with its annual results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. Results overall were respectable, with statutory earnings of US$13.96 per share roughly in line with what analysts had forecast. Revenues of US$13b came in 5.5% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Ameriprise Financial
Taking into account the latest results, the current consensus, from the seven analysts covering Ameriprise Financial, is for revenues of US$12.6b in 2020, which would reflect a perceptible 2.5% reduction in Ameriprise Financial's sales over the past 12 months. Statutory earnings per share are expected to surge 24% to US$17.53. Yet prior to the latest earnings, analysts had been forecasting revenues of US$12.6b and earnings per share (EPS) of US$16.37 in 2020. So the consensus seems to have become somewhat more optimistic on Ameriprise Financial's earnings potential following these results.
The consensus price target was unchanged at US$188, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Ameriprise Financial analyst has a price target of US$202 per share, while the most pessimistic values it at US$177. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 2.5% revenue decline a notable change from historical growth of 1.6% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 5.1% next year. It's pretty clear that Ameriprise Financial's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Ameriprise Financial following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Ameriprise Financial. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Ameriprise Financial going out to 2021, and you can see them free on our platform here..
You can also see whether Ameriprise Financial is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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