Company Reports

Ameriprise reported net income of $990 million, or $9.46 per diluted share, on $4.1 billion of net revenue for the first quarter of 2024. On a company-provided adjusted operating basis, which excludes the effects of changes in interest rates on some of its products, Ameriprise reported pro forma operating earnings per share of $8.39, up 16% from the previous year. Ameriprise also increased its quarterly dividend by 10% to $1.48 per share, and total capital return to shareholders was 74% of adjusted operating earnings. The management team expects to return 80% of operating earnings to shareholders in 2024, the same as its target in 2023. We don't anticipate making a material change to our $450 per share fair value estimate for narrow-moat-rated Ameriprise and assess shares as being fairly valued right now.

Ameriprise Financial has transformed itself into an investment management powerhouse, with about $1.4 trillion in total assets under management and advisement and around 10,000 financial advisors at the end of 2023. The firm gradually shifted away from insurance and emphasized asset and wealth management operations more. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the global asset-management industry with around $600 billion of assets under management, or AUM. About 80% of revenue comes from the company's wealth and asset management segments which should help the company generate operating margins consistently in the mid-20s compared with midteens to low-20s historically.

We are raising our fair value estimate for Ameriprise Financial by 17% to $444 from $379. We are also maintaining our narrow economic moat rating, High Uncertainty Rating, and Standard Capital Allocation Rating for the company. At current prices, we view Ameriprise shares as fairly valued to slightly undervalued, with the stock trading roughly 11% below our fair value estimate and in 3-star territory.

Ameriprise Financial has transformed itself into an investment management powerhouse, with about $1.4 trillion in total assets under management and advisement and around 10,000 financial advisors at the end of 2023. The firm gradually shifted away from insurance and emphasized asset and wealth management operations more. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the global asset-management industry with around $600 billion of assets under management, or AUM. About 80% of revenue comes from the company's wealth and asset management segments which should help the company generate operating margins consistently in the mid-20s compared with midteens to low-20s historically.

Ameriprise reported net income of $377 million, or $3.57 per diluted share, on $4.0 billion of net revenue for the fourth quarter of 2023. On a company-provided adjusted operating basis, which excludes the effects of changes in interest rates on some of its products, regulatory accrual charges (including an industrywide regulatory matter relating to electronic communication recordkeeping requirements), severance costs, and mark-to-market impact on share-based compensation expense, Ameriprise reported pro forma operating earnings per share of $7.75, up 14% from the previous year. Adjusted operating return on equity, excluding accumulated other comprehensive income, was a strong 48.5% for the quarter. We don't anticipate making a material change to our $379 per share fair value estimate for narrow-moat-rated Ameriprise and assess shares as being fairly valued right now.

Ameriprise reported net income of $872 million, or $8.14 per diluted share, on $3.9 billion of net revenue for the third quarter of 2023. On a company-provided adjusted operating basis, which excludes the effect of changes in interest rates on some of its products, Ameriprise reported pro forma operating earnings per share of $7.68, up 21% from the previous year. Adjusted operating return on equity, excluding accumulated other comprehensive income, was a strong 49.6% for the quarter. We don't anticipate making a material change to our $379 per share fair value estimate for narrow-moat-rated Ameriprise and assess shares as being slightly undervalued right now.

Ameriprise Financial has transformed itself into an investment management powerhouse, with about $1.3 trillion in total assets under management and advisement and around 10,000 financial advisors at the end of the second quarter of 2023. The firm continues to shift away from insurance and to place more emphasis on asset and wealth management operations. In 2019, the company closed the sale of its auto and home insurance business, and in 2020 it discontinued the sale of its proprietary fixed annuities. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the global asset management industry. Recently about 80% of revenue comes from the company's wealth and asset management segments that should help the company generate operating margins consistently in the low- to mid-20s compared with midteens to low-20s historically.

Ameriprise reported net income of $890 million, or $8.21 per diluted share, on $3.9 billion of net revenue for the second quarter of 2023. On a company-provided adjusted operating basis (which excludes the effect of changes in interest rates on some of its products), the company reported pro forma operating earnings per share of $7.44, up 30% from the previous year. Adjusted operating return on equity (excluding accumulated other comprehensive income) was a strong 50.9% for the quarter.

Ameriprise reported net income of $417 million, or $3.79 per diluted share, on $3.7 billion of net revenue for the first quarter of 2023. On a company-provided, adjusted operating basis that excludes the effect of changes in interest rates on some of its products, the company reported pro forma operating earnings per share of $7.25, up 25% from the previous year, and adjusted operating return on equity excluding accumulated other comprehensive income was a strong 49.5% in the quarter. We don't anticipate making a material change to our $358 per share fair value estimate for narrow-moat-rated Ameriprise and assess the shares as being modestly undervalued.

Ameriprise Financial has transformed itself into an investment management powerhouse, with about $1.2 trillion in total assets under management and advisement and around 10,000 financial advisors at the end of the fourth quarter of 2022. The firm continues to shift away from insurance and to place more emphasis on asset and wealth management operations. In 2019, the company closed the sale of its auto and home insurance business, and in 2020 it discontinued the sale of its proprietary fixed annuities. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the global asset management industry. Recently about 80% of revenue comes from the company's wealth and asset management segments that should help the company generate operating margins consistently in the low- to mid-20s compared with midteens to low-20s historically.

Most of the issues that affected Silicon Valley Bank don’t apply to the wealth management firms and investment banks that we cover, so we don’t plan to make material changes to our fair value estimates or Morningstar Economic Moat Ratings for Morgan Stanley, Goldman Sachs, Ameriprise Financial, Raymond James Financial, LPL Financial, Stifel Financial, Evercore Group, or Lazard.

Ameriprise reported net income of $494 million, or $4.43 per diluted share, on $3.6 billion of net revenue for the fourth quarter. On a company-provided adjusted operating basis that excludes the effect of changes in interest rates on some of its products, Ameriprise reported pro forma operating earnings per share of $6.94, up 13% from the previous year. Adjusted operating return on equity excluding accumulated other comprehensive income was a strong 48.1% in the quarter. We don’t anticipate making a material change to our $333 fair value estimate for narrow-moat-rated Ameriprise. We assess the shares as fairly valued.

Ameriprise reported net income of $548 million, or $4.86 per diluted share, on $3.5 billion of net revenue for the third quarter. On a company-provided adjusted operating basis that excludes the effect of changes in interest rates on some of its products, Ameriprise reported pro forma operating earnings per share of $6.43, up 9% from the previous year. Adjusted operating return on equity excluding accumulated other comprehensive income was a strong 47.9% in the quarter. We don’t anticipate making a material change to our $333 fair value estimate for narrow-moat Ameriprise. We assess the shares as being modestly undervalued.

Ameriprise Financial has transformed itself into a financial powerhouse, with about $1.2 trillion in total assets under management and advisement and around 10,000 financial advisors at the end of the second quarter of 2022. The firm continues to shift away from insurance and to place more emphasis on asset and wealth management operations. In 2019, the company closed the sale of its auto and home insurance business, and in 2020 it discontinued the sale of its proprietary fixed annuities. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the global asset management industry. Recently about 80% of revenue comes from the company's wealth and asset management segments that should help the company generate operating margins consistently in the low- to mid-20s compared with midteens to low-20s historically.

Ameriprise reported net income of $756 million, or $6.61 per diluted share, on $3.5 billion of net revenue for the second quarter of 2022. On a company-provided, adjusted operating basis (that excludes the effect of changes in interest rates on some of its products), the company reported pro forma operating earnings per share of $5.81, up 10% from the previous year but down 3% sequentially. Adjusted operating return on equity excluding accumulated other comprehensive income was a strong 48.8% for the quarter. We don't anticipate making a material change to our $338 per share fair value estimate for narrow-moat rated Ameriprise and assess the shares as being moderately undervalued right now.

Many investment service firms (wealth managers, retail brokerages, custody banks, and asset managers) have material exposure to interest rates. Clients at wealth management firms and retail brokerages typically have 5%-20% of their account balance in cash that the financial institution sweeps into a bank subsidiary. The deposits are then used to make loans or invest in fixed-income securities. They may also earn asset management or distribution fees on client assets in money market funds.

Ameriprise reported net income of $761 million, or $6.55 per diluted share, on $3.7 billion of net revenue for the first quarter of 2022. On a company-provided, adjusted operating basis that excludes the effect of changes in interest rates on some of its products, the company reported pro forma operating earnings per share of $5.98, up 10% from the previous year and down 3% sequentially. Adjusted operating return on equity excluding accumulated other comprehensive income was a strong 49.9% in the quarter. We are maintaining our $338 fair value estimate for narrow-moat Ameriprise and assess shares as being modestly undervalued.

We are increasing our fair value estimate for narrow-moat-rated Ameriprise Financial to $338 per share from $262, which implies around a 13 times P/E multiple of 2023 projected earnings and about 7 times tangible book value. Almost all the increase in our fair value estimate is from increasing our forecast for the company's operating margins to around 23% from the high-teens. Historically, the company had operating margins in the midteens to low-20s. After reducing its insurance operations and expansion of its wealth and asset management businesses, we believe that the company should be able to maintain low- to mid-20s operating margins going forward.

Ameriprise Financial has transformed itself into a financial powerhouse, with $1.4 trillion in total assets under management and advisement and around 10,000 financial advisors at the end of 2021. The firm continues to shift away from insurance and to place more emphasis on asset and wealth management operations. In 2019, the company closed the sale of its auto and home insurance business, and in 2020 it discontinued the sale of its proprietary fixed annuities. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the global asset management industry. Recently about 80% of revenue comes from the company's wealth and asset management segments that should help the company generate operating margins consistently in the low- to mid-20s compared with midteens to low-20s historically.

With roots in insurance, Ameriprise Financial has transformed itself into a financial powerhouse, with $1.4 trillion in total assets under management and advisement and around 10,000 financial advisors at the end of 2021. The firm continues to shift away from insurance and to place more emphasis on asset and wealth management operations. In 2019, the company closed the sale of its auto and home insurance business, and in 2020 it discontinued the sale of its proprietary fixed annuities. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the global asset management industry. Recently about 80% of revenue comes from the company's wealth and asset management segments.