Ameriprise Financial, Inc (AMP)

Spun off from American Express in 2005, Ameriprise Financial, Inc. (AMP) is a diversified financial services company.  It has three operating divisions: Advice and Wealth Management, by far AMP’s fastest growing unit, makes up about two-thirds of its adjusted operating earnings; while Asset Management and Retirement & Protection Solutions represent 16% and 19%, respectively, of this key financial metric. 

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Why We are Bullish on AMP:

• AMP is widely recognized as one of the leading players in the global wealth management business, an industry with underlying growth characteristics rivaling the fastest-growing segments of the technology sector.  Household wealth has quadrupled over the last 35 years, and investable assets have grown at a near exponential rate over this same period, increasing 1,600% in aggregate.
• Price competition among wealth managers does exist, but it is less acute than in other commodity-like industries where multiple competitors offer quite similar services or products.  Instead, wealth managers compete by providing expanded personalized services (like tax planning and estate coordination) to a rapidly growing customer base that demands one-on-one assistance to reach their financial goals.
• AMP’s wealth management revenues and adjusted operating profits have both been increasing at low double digit average annual rates over the last few years, and its operating profit margins have held steady at a quite healthy 30%. 
• In turn, AMP’s EPS has increased by mid-to-high double digit percentages over each of the last three years (+14.4% in 2025, +19.0% in 2024, and +18.1% in 2023), as the company has prioritized share repurchases as the chief use of its excess free cash flow.  The company’s shares outstanding have been reduced by around 5% annually since year-end 2020, which equates to a 23% reduction since December 31, 2020.
• Surprisingly, investors have been reluctant to allocate their dollars into AMP’s stock.  Its share price is down 9% over the first five months of 2026, and down 18% from its recent peak in early February 2026.
• AMP trades at a P/E ratio of just 10.1x (based on analysts’ consensus 2026 EPS estimate of just over $44).  This multiple represents a 16% discount to AMP’s average P/E ratio over the five-year period 2021-2025, and an approximate 19% discount to the 12.4x average P/E multiple of four similarly positioned companies. 
• Factoring in all this, we believe AMP’s achieving a 12x P/E ratio, which would bring its multiple approximately in line with its peer companies, is a reasonable near-term target.  Each one P/E multiple point improvement for AMP would equate to about a $45 boost to its stock price.

What is the Bear Case?  Investors generally consider the possible impact of a sharp and/or prolonged stock market decline as the biggest threat AMP faces.  The degree of this risk is limited by the composition of AMP’s operating earnings whereby wealth management’s percentage contribution has reached 65% and continues to grow.  The stickiness of wealth management clients (not just for AMP, but for the wealth management industry in general) suggests the magnitude of any downturn in fees will be fairly modest.  Furthermore, AMP’s P/E multiple of only about 10x more than fully discounts this uncertainty.

Investment Summary

Ameriprise Financial, Inc. (AMP) is widely recognized as one of the leading players in the global global wealth management business, an industry with underlying growth characteristics rivaling the fastest-growing segments of the technology sector.  More specifically, household wealth has quadrupled over the last 35 years, and investable assets have grown at a near exponential rate over this same period, increasing 1,600% in aggregate. [1]  In 2025, the global wealth management industry had $62 trillion in assets under management (AUM); this figure is expected to reach $85 trillion by 2028. [2]

While price competition among wealth managers (called fee compression) certainly does exist, it is less acute than in other commodity-like industries where multiple competitors offer quite similar services or products.  Instead, wealth managers compete by providing expanded personalized services (like tax planning and estate coordination) to a rapidly growing customer base that demands one-on-one assistance to reach their financial goals. [3]

Against this backdrop, AMP’s wealth management revenues and adjusted operating profits have both been increasing at low double digit average annual rates over the last few years, and its operating profit margins have held steady at a quite healthy 30%.  Furthermore, AMP’s EPS has increased by mid-to-high double digit percentages over each of the last three years (+14.4% in 2025, +19.0% in 2024, and +18.1% in 2023), as the company has prioritized share repurchases (ranging from $2.1 billion to $2.9 billion over the last three years) as the chief use of its excess free cash flow.  The company’s shares outstanding have been reduced by around 5% annually since year-end 2020, which equates to a 23% reduction since December 31, 2020. [4]

Quite surprisingly in light of all this, investors have been reluctant to allocate their dollars into AMP’s stock.  Its share price is down 9% over the first five months of 2026, and down 18% from its recent peak in early February 2026.  Remarkably, AMP trades at a P/E ratio of just 10.1x (based on analysts’ consensus 2026 EPS estimate of just over $44 [5]).  Furthermore, this multiple represents a 16% discount to AMP’s average P/E ratio over the five-year period 2021-2025 (see Table 1), and an approximate 19% discount to the 12.4x average P/E multiple of four similarly positioned companies (see page 9).  Factoring in all this, we believe AMP’s achieving a 12x P/E ratio, which would bring its multiple approximately in line with its peer companies, is a reasonable near-term target.  Each one P/E multiple point improvement for AMP would equate to about a $45 boost to its stock price.

Ameriprise Financial, Inc. — P/E Multiple Over the Five-Year Period 2021-2025

Company Description

Spun off from American Express in 2005, AMP is a diversified financial services company.  The company has three operating divisions: Advice and Wealth Management, by far AMP’s fastest growing unit, makes up about two-thirds of its adjusted operating earnings; while Asset Management and Retirement & Protection Solutions represent 16% and 19%, respectively, of this key financial metric.  Ten years ago, these three units each contributed about one-third of AMP’s adjusted operating earnings. 

Ameriprise Financial, Inc. — Composition of Operating Earnings

AMP’s wealth management division considers its primary target market to be