Ameriprise's Strategies Fuel Growth, Costs Remain A Worry

On Jun 24, 2016, we issued an updated research report on Ameriprise Financial, Inc. (NYSE:AMP) . Despite the company’s strong capital position and continued focus on business growth, estimates have been declining lately, prior to the second-quarter earnings release given the continued equity market volatility and outflows in the Asset Management segment.

Further, adverse impact of elevated expenses and unfavorable foreign exchange movement is offset by disciplined financial planning and strength in product development.

Ameriprise operates a well diversified portfolio and modifies its product and service-offering capacity to keep pace with the dynamic market needs. Although heightened equity market volatility affected the first quarter 2016 results, product introductions and rebound will support the top line growth in the quarters ahead.

Further, Ameriprise maintains a strong balance sheet by utilizing enterprise risk-management capabilities and product hedging to predict and mitigate risks. Moreover, the company is expected to continue enhancing shareholders' value through dividend hikes and share repurchase activities and grow inorganically through acquisitions, sales and spin-offs.

While management’s initiatives to strengthen expense management has resulted in controlled general and administrative expenses and acquisition-related costs; advertising campaigns, technology upgrades and fixed interest costs and claims are likely to keep expenses elevated in the near term.

Moreover, increased dependence on the Asset management segment, which has been reporting major outflows lately and is expected to report the same in the coming quarters, will hurt Ameriprise’s revenue.

As a result of these concerns, analysts are bearish on the stock. Over the last 60 days, Zacks Consensus Estimate declined 1.35% and 0.82% for 2016 and 2017 respectively.

Currently, Ameriprise Financial holds a Zacks Rank #3 (Hold).

Stocks That Warrant a Look

Some better ranked Financial Investment management companies include Manning and Napier Inc. (NYSE:MN) , sporting a Zacks Rank #1 (Strong Buy), Eagle Point Credit Company Inc. (NYSE:ECC) and OM Asset Management plc (NYSE:OMAM) , both carrying a Zacks Rank #2 (Buy).


AMERIPRISE FINL (AMP): Free Stock Analysis Report

OM ASSET MGMT (OMAM): Free Stock Analysis Report

EAGLE POINT CRD (ECC): Free Stock Analysis Report

MANNING&NAPIER (MN): Free Stock Analysis Report

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