Ameriprise Authorizes Share Buyback - Analyst Blog
June 16 2011 - 8:45AM
Zacks
Ameriprise Financial Inc. (AMP) announced that
its board of directors has authorized a new share repurchase
program, under which the company will be able to buyback its common
shares worth $2 billion through June 28, 2013.
Ameriprise stated that this new share repurchase authorization
is an extension of its current program. The current program,
announced in May 2010, authorizes the company to repurchase $1.5
billion worth of common stock.
Ameriprise further stated that through the first quarter of
2011, the company bought back $969 million of common stock under
the current program. The remaining $531 million is available till
the next annual meeting in 2012.
Ameriprise will fund the share buybacks with the help of the
future earnings, existing working capital and other financing
means. Additionally, the new share buyback program would not
require purchase of any minimum number of shares. Further, such
programs can be suspended without any prior intimation. Ameriprise
also commented that shares would be bought back from open market
and block trades or through private negotiations.
Though there is concern over the sluggish market recovery,
improvement in retail client activity, as well as a decent growth
in Advice & Wealth Management and Asset Management businesses,
will drive operating leverage in the upcoming quarters. Further,
the authorization of the new share buyback program raises our hopes
for enhanced investor confidence.
Ameriprise currently retains a Zacks # 3 Rank, which translates
into a short-term ‘Hold’ rating. However, one of the peers of the
company BlackRock Inc. (BLK) retains a Zacks # 2
Rank, which translates into a short-term ‘Buy’ rating.
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