Ameriprise surges on record $1.7T AUM, earnings beat
Wealth manager returned 101% of earnings to shareholders as client inflows hit $13.3B in Q4
Ameriprise Financial shares rallied after the wealth manager reported adjusted operating earnings per share of $10.83 for the fourth quarter, beating analyst estimates by 5% and delivering a 16% increase from the prior year. The Minneapolis-based company's performance was fueled by record assets under management and aggressive capital returns to shareholders.
Revenue of $4.96 billion exceeded the $4.73 billion consensus forecast, representing a 5% beat on the top line, according to earnings data compiled by MarketBeat. The results, released before markets opened on January 29, come as wealth managers benefit from sustained market strength and increased client engagement following a period of volatility.
Assets under management, administration, and advisement climbed to a record $1.7 trillion, an 11% year-over-year increase. The growth was driven by $13.3 billion of client net inflows, which Chief Executive Officer Jim Cracchiolo described as marking "one of our best quarters for client inflows" amid what he termed "robust client activity."
"Our diversified business model and strong client engagement continued to drive performance across the enterprise," Cracchiolo said in the earnings announcement. The company's adjusted operating margin reached 27% in the quarter, while return on equity stood at 53.2%, which the company characterized as best-in-class.
Perhaps most striking for investors was the company's capital allocation strategy. Ameriprise returned $1.05 billion to shareholders during the quarter, representing 101% of adjusted operating earnings. Share repurchases surged 45% to $897 million, a signal of management's confidence in the business and its valuation. The company also continued paying dividends, bringing total capital distributions to more than $1.1 billion.
The stock, which closed at $499.67 on Wednesday, has been climbing toward analysts' average price target of $545.30, according to market data. The shares have traded in a 52-week range of $392.21 to $574.69, reflecting investor enthusiasm for the wealth management sector as asset prices have recovered.
Wall Street analysts maintain a mixed view on the stock. Of the 14 analysts covering Ameriprise, the consensus rating is "Hold," according to recent analyst data. Bank of America recently raised its price target to $653 while maintaining a "Buy" rating, while Argus Research kept its "Buy" rating but lowered its target to $554 from $568.
The strong fourth quarter capped a year of significant growth for Ameriprise, which has been navigating a competitive landscape in wealth management and asset management. The company's focus on holistic financial planning and its diversified product mix have helped it attract and retain high-net-worth clients even as smaller fintech competitors have entered the space.
Looking ahead, investors will be watching whether Ameriprise can sustain its impressive client inflow momentum and whether market conditions remain favorable for continued AUM growth. The company's ability to generate industry-leading returns on equity while returning capital to shareholders positions it well even if market volatility returns in 2026.
Analysts are also expected to probe management on the company's acquisition strategy and integration efforts during the earnings conference call, which was scheduled for 8:00 a.m. Eastern Time on Thursday. Ameriprise has historically used selective acquisitions to expand its capabilities in areas such as retirement planning and workplace benefits.