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Why Ameriprise Financial (AMP) Stock Is Gaining

NEW YORK (TheStreet) -- Ameriprise Financial (AMP) was gaining 0.1% to $103.51 in after-market trading Monday after beating analysts' estimates for earnings in the first quarter.

For the first quarter the company reported earnings of $2.04 a share, beating analysts' estimates of $1.88 a share by 16 cents. Revenue increased 11.2% from the year-ago quarter to $2.99 billion.

"Ameriprise delivered another strong quarter," said Jim Cracchiolo, chairman and CEO. "Revenues and earnings were up nicely and our operating return on equity reached a new record of 20.8 percent."

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TheStreet Ratings team rates AMERIPRISE FINANCIAL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMERIPRISE FINANCIAL INC (AMP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, AMERIPRISE FINANCIAL INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, AMP's share price has jumped by 45.69%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AMP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • AMERIPRISE FINANCIAL INC's earnings per share declined by 18.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERIPRISE FINANCIAL INC increased its bottom line by earning $6.45 versus $4.64 in the prior year. This year, the market expects an improvement in earnings ($7.99 versus $6.45).
  • 45.04% is the gross profit margin for AMERIPRISE FINANCIAL INC which we consider to be strong. Regardless of AMP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.02% trails the industry average.
  • You can view the full analysis from the report here: AMP Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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