Pali Research Downgrades Invesco Ltd. (IVZ) to Neutral; Acquisition Needed For Shares to Move Higher

October 15, 2009 9:38 AM EDT

Pali Research downgrades Invesco Ltd. (NYSE: IVZ) to Neutral.

Pali analyst says, "Shares are essentially at our stated price target of $24. Shares now trade at 20x our 2010 EPS estimate of $1.19, which is roughly in-line with the group average...We think that for shares to move materially higher in the short term, an acquisition is becoming crucial. One transaction in particular, Van Kampen, has been discussed as a target. We estimate that a deal with Van Kampen could add between $3 and $4 to shares assuming accretion of approximately 10%. While $3 to $4 is not immaterial, much of the risk/reward opportunity has been captured by the run-up in shares since deal speculation first materialized...W.L. Ross and alternative business lines may offer some upside. IVZ is still one of the best positioned managers for the long-term, in our view. Franchises such as W.L. Ross and IVZ’s participation in the Treasury’s PPIP create the potential for near term and long-term EPS upside."

To see more analyst ratings on IVZ Click Here.

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail, institutional, and private wealth management clients.

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