Ameriprise shares jump on strong earnings, upgrade

posted: 32 DAYS 23 HOURS AGO

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BOSTON -Shares of Ameriprise Financial Inc. surged to a new year high Thursday after the financial services company posted a third-quarter profit that beat Wall Street's expectations, prompting an analyst to upgrade the stock.

The stock added $2.23, or about 6.3 percent, to $37.72 in afternoon trading. The stock earlier traded at $38.29, eclipsing a previous year-high of $37.80 set early this month.

The Minneapolis-based provider of financial planning, asset management and insurance services late Wednesday reported net income of $260 million, or $1 per share, a turnaround from a loss of $70 million, or 32 cents per share, in the year-ago quarter. The latest quarter's adjusted profit totaled $1.03, easily beating a 64-cent-per-share consensus estimate of analysts polled by Thomson Reuters.

On Thursday, Standard & Poor's Equity Research Matthew Albrecht raised his rating of the stock to "Hold" from "Sell," citing the better-than-expected profit. Albrecht also cited gains in client assets and investment income, as well as favorable expectations for Ameriprise's recently announced plans to acquire the long-term asset management business of Bank of America Corp.'s Columbia Management unit for up to $1.2 billion.

Sterne Agee analyst John Nadel reaffirmed his "Buy" rating for the stock and called Ameriprise's quarterly results "a solid beat." He boosted his earnings expectations, and raised his price target for the stock to $44 from $42.

Nadel wrote in a research report that he views Ameriprise "as an excellent risk/reward at current levels," with long-term investors likely to be rewarded for sticking with the stock.

Ameriprise has said the Columbia acquisition will boost its earnings within one year, excluding integration costs. The company said the acquisition will generate between $130 million and $150 million in annual cost savings, with about half of the savings being realized in the first year after the purchase is completed in the spring.

2009-10-22 14:13:50