Invesco may be undervalued with mixed growth prospects, but the 12 analysts following the company give it an rating of hold. Their target prices range from $15.0 to $21.0 per share, for an average of $17.88. At today's price of $17.03, Invesco is trading -4.75% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.
Invesco Ltd. is a publicly owned investment manager. Based in Atlanta, GA, the mid-cap Finance company has 8,611 full time employees. Invesco has not offered a regular dividend during the last year.
Invesco has a trailing twelve month P/E ratio of 12.3, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of 1.95, the company has a forward P/E ratio of 8.7.
The average compound growth rate of the company's historical and projected earnings per share is 8.8%. On this basis, the company's PEG ratio is 1.38, which shows that it is fairly priced.
Furthermore, the market is potentially undervaluing Invesco in terms of its book value because its P/B ratio is 0.7. In comparison, the sector average P/B ratio is 1.57. The company's shares are currently -44.5% below their Graham number, indicating that its shares have a margin of safety.
So why are analysts giving IVZ a bad rating? We believe analysts could be alarmed by the company's disappointing -8.5% rate of cash flow growth over the last 4 years. You can see for yourself in the financial summary table below:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $6,117 | $6,146 | $6,894 | $6,049 |
| Revenue Growth | n/a | 0.46% | 12.19% | -12.26% |
| Operating Margins | 24.2% | 21.4% | 25.0% | 22.1% |
| Operating Margins Growth | n/a | -11.57% | 16.82% | -11.6% |
| Earnings Per Share | $1.28 | $1.13 | $2.99 | $1.38 |
| EPS Growth | n/a | -11.72% | 164.6% | -53.85% |
| Diluted Shares (MM) | 440 | 462 | 466 | 458 |
| Free Cash Flow (MM) | $992 | $1,230 | $1,078 | $696 |
| FCF Growth | n/a | 23.98% | -12.37% | -35.42% |
| Capital Expenditures (MM) | -$124 | -$115 | -$109 | -$193 |
| Net Debt / EBITDA | 5.87 | 5.31 | 3.17 | 4.86 |
