Citi Rates Invesco (IVZ) A Medium Risk

Citi Investment Research & Analysis analysts William R Katz and Neil Stratton rated shares of Invesco Ltd IVZ a Medium Risk, with a price target of $25 per share. The analysts said that the Invesco Ltd price target of 15 x target P/E was in line with the company's peers. They said that the main risks that could prevent Invesco Ltd from reaching its price target are below average markets, large foreign exchange swings and problems integrating deals. The Citi Investment Research & Analysis analysts wrote, "We forecast AUM to decline 6.2% from $457 billion at 4/30 to $429 billion at 5/31. Beyond market depreciation, our forecast explicitly assumes an adverse impact to AUM of $10B from FX fluctuations in the EUR and GBP. We look for LT outflows of $2.8B (9% annualized loss rate) in May and money market attrition of $1B (15% annualized loss rate). Consistent with other managers, we also assume slowing retail volumes. However, our $2.8B LT attrition forecast includes $3.2B of ETF attrition, with ~75% of the passive run-off from products where the company does not generate management fees. As such, our adjusted LT flow forecast would be flattish after removing the impact."