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Is Ameriprise (AMP) Likely to Beat Q1 Earnings Estimates?

Zacks

We expect Ameriprise Financial, Inc. AMP to beat expectations when it reports first-quarter 2017 results after the market closes on Apr 24.

Last quarter, Ameriprise’s earnings surpassed the Zacks Consensus Estimate primarily due to lower operating expenses. Also, assets under management (AUM) witnessed growth. However, a fall in top line hurt the results to some extent.

Following the earnings beat, the company’s shares gained nearly 16% in the three months (ended Mar 31).

However, the Zacks Consensus Estimate of $2.52 for the first quarter declined marginally in the last seven days. The figure reflects a year-over-year improvement of 16.2%.

Notably, Ameriprise lagged the Zacks Consensus Estimate in three of the trailing four quarters, as is evident from the chart below:

AMERIPRISE FINANCIAL SERVICES, INC. Price and EPS Surprise

AMERIPRISE FINANCIAL SERVICES, INC. Price and EPS Surprise | AMERIPRISE FINANCIAL SERVICES, INC. Quote


Why a Likely Positive Surprise?

Our proven model indicates that chances of Ameriprise beating the Zacks Consensus Estimate this time are quite high. This is because it has both a positive Earnings ESP and a favorable Zacks Rank – a Zacks Rank #3 (Hold) or better. This key combination is what a stock needs for a significantly higher chance of beating estimates.

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

Zacks ESP: Ameriprise has an Earnings ESP of +0.40%. This is because the Most Accurate estimate of $2.53 is above the Zacks Consensus Estimate of $2.52.

Zacks Rank: Ameriprise currently carries a Zacks Rank #2 (Buy), which increases the predictive power of ESP.

Factors to Influence Q1 Results

Ameriprise’s persistent efforts in improving business are expected to have a positive impact on profitability during the quarter.

Further, we expect Advice & Wealth Management segment’s (AWM) performance to drive the company’s results. The AWM segment had delivered growth in assets in the previous quarter. Based on expectations of improved advisor productivity, the same is expected to continue in the to-be-reported quarter.

The company expects margin expansion in the AWM segment to continue over time, assuming no significant market disruptions.

Management expects DOL expenses in the to-be-reported quarter to remain stable on a sequential basis, as it prepares to implement the DOL regulation in April.

Other Stocks that Warrant a Look

Here are a few other finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming announcements.

Zions Bancorporation ZION is slated to release results on Apr 24. It has an Earnings ESP of +1.85% and a Zacks Rank #3.

T. Rowe Price Group, Inc. TROW has an Earnings ESP of +0.84% and a Zacks Rank #3. The company is slated to release results on Apr 25.

Lazard Ltd LAZ is scheduled to release results on Apr 27. It has an Earnings ESP of +6.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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