Wells Fargo Lowers Invesco Estimates

Following the Invesco IVZ earnings conference call, Wells Fargo is reducing its 2010 EPS estimate from $1.35 to $1.31 and our 2011 EPS from $1.70 to $1.60. IVZ recently announced Q3 cash EPS of $0.39 compared to our estimate for $0.39. Our valuation range of $23-$24 remains unchanged. The company reported Q3 Cash EPS of $0.39, which was in line with our estimate of $0.39. However, there were some key variances. Total operating revenues of $953.1MM were lower than our estimate of $957.4MM due to higher service/distribution fees and other fees, offset by lower investment management fees and performance fees. Relative to Wells Fargo's estimates, net operating revenues of $686.6MM were slightly better than our forecast of $681.7MM. Total operating expenses of $770.2MM were higher than our estimate of $751.8MM, primarily due to higher employee compensation expense relative to the forecast. Well Fargo maintains its Market Perform rating. IVZ is trading higher at $22.18