This investment manager can soar on proposed change to widely followed fund, says TD Cowen

CNBC

21-07-2025

Invesco could be on the verge of a "game changer," according to TD Cowen. TD Cowen upgraded the investment management stock to buy from hold and raised its price target to $25 per share from $17.50. The firm's forecast implies about 26% upside from Friday's close. Analyst Bill Katz pointed to Invesco's recent Securities and Exchange Commission filing, which showed the company sought approval to restructure certain aspects of its Invesco QQQ Trust (QQQ) to reflect an open-ended fund as opposed to a unit investment trust (UIT). The QQQ, which tracks the Nasdaq-100 index, is one of the most widely held funds both by institutions and retail investors alike. It has about $355 billion in assets. IVZ YTD mountain Invesco stock in 2025. "We believe this is a major development for the firm - and though the stock jumped ~15% on [Friday], we see additional follow through, likely post 2Q results set for 7/22," the analyst said. The potential reorganization of Invesco's premier ETF could allow the company to capitalize on a greater share of fee revenue from the ETF, which would also benefit stakeholders in QQQ, Katz wrote. The move could also see a decline in the fund's expense ratio if the proposed changes are approved. "We think the move on 7/18 was purely reflective of earnings accretion; we see room for additional multiple expansion as investors think through implication," Katz added. Invesco reports second-quarter earnings on Tuesday. Shares gained more than 2% Monday after the upgrade. Year to date, the company is up 14%.