Invesco Ltd. (IVZ): what the price requires
At today's price, Invesco Ltd. (IVZ) is priced for today's economics sustained for ~5.8 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/IVZ
Headline
| Field | Value |
|---|---|
| Ticker | IVZ |
| Company | Invesco Ltd. |
| Current price | $28.48/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | fee-financial |
| Top-of-range earnings growth must hold for | 5.8y |
| Price-to-earnings | 23.5x |
| Earnings yield | 4.3% |
Uses a multi-year earnings base; the latest year was lumpy (carry / trading / one-offs).
Solve inputs: computed at a 13.1% cost of equity; growth searched up to the 20% fee-earnings ceiling; each 1pp moves the implied horizon ~1.2 years.
Reconcile: at the x-ray's 9.3% required return this reads ~7.9%/yr; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +0.69σ |
| cohort percentile (of 49 peers) | 59 |
| sustained it ~5.8 years at this level | 24% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.17x | 3 | expensive |
| Earnings | 0.78x | 3 | justifies |
| Relative | 0.65x | 2 | justifies |
| Growth | 0.96x | 4 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.2%); the inversion above states its own rate.
Per-Model Detail (n=12)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $101.48 | 0.28x | yes | FCF base $1.9B, growth 8% (input: historical growth), terminal g 4.0%, WACC 8.1%, 6yr projection |
| DCF Exit Multiple | Growth | $44.09 | 0.65x | yes | Exit EV/EBITDA: 10.4x / 12.4x / 14.4x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $43.59 | 0.65x | yes | P/S fallback (negative EPS): Sector P/S 3.0x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | $7.45 | 3.82x | yes | DPS $0.84, g=-1.8% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $0.28 | 101.71x | yes | Stage 1: -73% for 5yr, Stage 2: 3.5% perpetual (excluded from median) |
| Simple Excess Return | Asset | $27.01 | 1.05x | yes | Reference only (book value floor): BV/sh $27.01, ROE negative |
| Two-Stage Excess Return | Asset | $24.31 | 1.17x | yes | Reference only (book value with convergence): BV/sh $27.01, ROE converges to ke |
| Discounted Future Market Cap | Growth | $22.24 | 1.28x | yes | Rev $6.6B, growth 8% (input: historical growth; tapered), Terminal P/S: 1.6x / 2.0x / 2.3x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $8.57 | 3.32x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.59B × (1−27%) / WACC 8.1% → EPV (no growth) |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | $39.08 | 0.73x | yes | FCF $1747.4M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $36.73 | 0.78x | yes | SBC-adj FCF $1.65B (FCF $1.75B − SBC $0.10B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | $6.01 | 4.74x | yes | BV $27.01 × (ROIC 1.8% / WACC 8.1%) |
| P/Sales Sector | Relative | $43.59 | 0.65x | yes | Revenue $6.59B × sector P/S 3.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $1.2b |
| Net debt / NOPAT (after-tax) | 1.45x |
| Net debt / operating income (pre-tax) | 1.06x |
| Interest coverage | 13.1x |
| Share count CAGR (buyback) | -0.5% |
| Burning cash | no |
Bullet Takeaways
- Invesco is a global asset manager that earns fees on assets under management, which the 10-K describes as services "satisfied over time" tied to the value of the AUM, so revenue rises and falls with markets and with net flows.
- The counterintuitive point is that the trailing operating line is negative, dragged down by a non-cash charge, even as the business is running record assets and an adjusted operating margin of 34.5%, so the reported GAAP picture understates the underlying earnings power.
- Assets under management hit a record $2.16 trillion, up 17% year over year, with the eleventh straight quarter of net long-term inflows ($21.8 billion) and adjusted EPS up 29.5% to $0.57.
Bull Case
The most surprising thing in Invesco's numbers is that the headline operating line is negative while the business is having one of its best stretches in years. The trailing GAAP operating figure is dragged below zero by a large non-cash charge of the kind asset managers periodically take against goodwill, which is why several earnings-based valuation methods look broken here. Strip that out and the picture inverts: the company reported a record $2.16 trillion in assets under management, up 17% year over year, an adjusted operating margin of 34.5%, and adjusted EPS up 29.5% to $0.57. The metric that doesn't fit the negative-GAAP narrative is the flow trend, and flows are the lifeblood of an asset manager.
Those flows are the real story. Invesco logged its eleventh consecutive quarter of net long-term inflows, taking in $21.8 billion in the quarter for about 4.4% annualized organic growth. For an industry where most active managers bleed assets to passive products, eleven straight quarters of positive flows is evidence that Invesco's product mix, anchored by its large ETF franchise including the flagship QQQ, is on the right side of where money is moving. The 10-K frames the core revenue model plainly: fees earned on the value of AUM, satisfied over time, supplemented by distribution and digital-solutions fees. More AUM and positive flows mean more fee revenue mechanically, and the operating leverage in the model means margin expands as assets grow.
The capital story reinforces the turnaround. Invesco redeemed $500 million of maturing senior notes, repurchased $40 million of stock, raised the quarterly dividend to $0.215, and authorized an additional $1 billion buyback in the quarter. The excess-return valuation method lands right around the current price, and the free-cash-flow methods land above it, so the cash-generating reality of the business supports the valuation even where the GAAP earnings methods cannot. The bull case is straightforward once the noise is removed: a record-AUM asset manager with eleven quarters of inflows, expanding adjusted margins, a strengthening balance sheet, and a rising dividend, priced as though its momentarily negative GAAP earnings reflect the real business.
Bear Case
The hard part of owning an asset manager is that its earnings are a leveraged bet on the level of markets, and Invesco's record AUM is therefore a peak-of-cycle figure as much as a triumph. Roughly a third of an asset manager's revenue rides on asset values that the manager does not control, so the $2.16 trillion in AUM and the 34.5% adjusted margin both reflect a market near highs. The quarter already showed the mechanism in reverse: market volatility cut about $42 billion from AUM, an effect that net inflows happened to offset this time. In a real market drawdown the AUM falls, the fee base falls with it, and the operating leverage that magnifies profits on the way up magnifies the decline on the way down. The current earnings are closer to peak than to sustainable.
The secular backdrop is the deeper concern. The asset-management industry faces relentless fee compression as money flows from higher-fee active products to lower-fee passive ones, and even Invesco's ETF success comes at a lower fee rate than the active products it is partly replacing. The company's flagship QQQ is a low-fee, scale-driven product, and management noted volatility pressured it during the quarter. Growing AUM while the average fee rate erodes is a treadmill: the dollars under management can rise even as revenue per dollar falls. Over a full cycle, the question is whether Invesco can grow assets fast enough to outrun the fee decline, and that is far from certain in a business where the structural tide favors the cheapest providers.
The valuation and the balance sheet leave less cushion than the flow momentum suggests. The negative GAAP operating result is not purely cosmetic; the charge reflects management's own assessment that some past acquisition value will not be recovered, and asset managers built partly through acquisition carry that integration and impairment risk recurringly. Invesco still carries about $1.2 billion of net debt, and the simple dividend-discount method lands far below the price, a reminder that the payout depends on AUM-driven earnings that can shrink quickly. The framework flags the name as elevated, with a fade signal tripped, precisely because the strong recent results are cyclically and flow-flattered. The bear case is not that Invesco is poorly run; it is that buying an asset manager at record AUM, into a structural fee-compression headwind, is buying near the top of its own cycle.
Valuation
Invesco has to be valued as a fee financial, where earnings are a function of assets under management and the GAAP operating line can be distorted by non-cash charges. At $28.14 (June 27, 2026) the trailing GAAP operating result is negative because of an impairment-type charge, which is why the zero-growth earnings-power value (near $8) and the residual-income method are not meaningful here and several earnings methods are correctly skipped. The methods that capture the cash-generating reality tell a more sensible story: the simple excess-return method lands right at the price near $27, the free-cash-flow methods land above it in the high thirties, and the perpetual-growth DCF runs far higher. The framework reads the price as supported on asset, earnings, relative, and growth grounds once the cash basis is used.
The central judgment is which earnings to anchor on. On adjusted earnings, with EPS up 29.5% to $0.57 in a single quarter and an adjusted operating margin of 34.5%, the business is clearly profitable and the price is undemanding. On GAAP, the trailing operating line is negative because of the charge. The honest read sits with the adjusted and cash-flow lenses, because the impairment is non-cash and backward-looking while the fee revenue and free cash flow are ongoing.
The balance sheet is adequate for the business model. Invesco carries about $1.2 billion of net debt and just redeemed $500 million of maturing notes, while raising the dividend and authorizing a fresh $1 billion buyback, which it would not do from a position of weakness. The price is fair for a strong point in the cycle, not cheap against a market downturn.
Catalysts
Invesco's first quarter of 2026 was a momentum quarter on nearly every operating measure. Assets under management reached a record $2.16 trillion, up 17.1% year over year, the firm logged its eleventh consecutive quarter of net long-term inflows at $21.8 billion (4.4% annualized organic growth), net revenues rose to $1.26 billion, and the adjusted operating margin widened to 34.5%, lifting adjusted EPS 29.5% to $0.57. Market volatility trimmed about $42 billion from AUM and pressured the flagship QQQ, but net inflows more than offset it. The board raised the quarterly dividend to $0.215 and authorized an additional $1 billion repurchase, on top of redeeming $500 million of senior notes.
The catalysts from here are a mix of market-driven and flow-driven. The dominant variable is the level and direction of equity and fixed-income markets, since AUM and therefore fee revenue move with them; a sustained market advance compounds the story while a drawdown reverses it. On the controllable side, the things to watch are whether the inflow streak extends into a twelfth and thirteenth quarter, the trajectory of the average fee rate as mix shifts toward lower-fee ETFs, and continued progress on the adjusted operating margin. Capital return through the enlarged buyback and the raised dividend is a steady support. The question that resolves the stock is whether net flows and margin gains can keep outrunning fee compression through the next market cycle, or whether the record AUM proves to be a high-water mark.
Peer Cohorts (Per Segment, With Filing Citations)
Investment management (single segment) (reported)
- BEN (FRANKLIN RESOURCES, INC.)
- (no filing in the citation store)
- AMG (AFFILIATED MANAGERS GROUP, INC.)
- (no filing in the citation store)
- FHI (Federated Hermes, Inc.)
- (no filing in the citation store)
- APAM (Artisan Partners Asset Management Inc.)
- (no filing in the citation store)
- TROW (PRICE T ROWE GROUP INC)
- (no filing in the citation store)
- AMP (AMERIPRISE FINANCIAL INC)
- (no filing in the citation store)
- SEIC (SEI INVESTMENTS COMPANY)
- (no filing in the citation store)
- MORN (MORNINGSTAR, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Invesco Q1 2026 earnings, Investing.com / GuruFocus, April 2026 · Invesco Q1 2026 earnings, Investing.com, April 2026 · Invesco Q1 2026 earnings, StockTitan, April 2026 · Invesco Q1 2026 earnings, GuruFocus / Investing.com, April 2026