S&P Downgrade Invesco (IVZ) from Strong Buy to Buy

S&P downgraded Invesco (NYSE: IVZ) from Strong Buy to Buy, in the Mar.17, edition of Outlook.

The downgrade was based on S&P’s estimates of assets under management falling at Invesco. At the end of February assets fell 2.4% from December levels. This lagged market returns and the projections for asset growth, suggesting that Invesco may have seen outflows in the first quarter.

Invesco's stock underperformed peers year-to-date through early March, so slower growth may be priced in. The multiple and earnings growth S&P previously expected may be delayed. They trimmed the 2010 earnings per share estimate by $0.06 to $1.26, initiated their 2011 projection at $1.47. S&P cut the target price by $5 to $23, which is 18.3 times the 2010 estimate and in line with the stock’s historical multiple.