Ameriprise Earnings: Asset Prices to Be a Bigger Driver of Earnings Than Interest Rates

Ameriprise Financial’s results continue to benefit from gains in stock prices. The company reported net income to common shareholders of $10.7 billion, or $10.58 per diluted share, on $4.5 billion of net revenue for the fourth quarter. On a company-provided adjusted operating basis that excludes the effect of changes in actuarial assumptions on some of its insurance products and some other adjustments, the company reported pro forma operating earnings per share of $9.36, up 23% from the previous year. Net revenue increased 13% from a year ago and 2% sequentially, with most of the revenue increases from wealth- and asset-management fees. We don’t anticipate making a significant change to our $487 fair value estimate for narrow-moat-rated Ameriprise. We assess the shares as somewhat overvalued after the runup in price since October.