UBS has initiated coverage on Invesco (IVZ) with a bullish rating, based on its assessment that the company has a structural trend of improving growth and possesses a richly diversified portfolio of investment products.

In a research note published on Tuesday, the analyst initiated coverage on the asset management firm, upgrading it to Buy with a price target of $41. Compared with the stock's closing price of $30.36 on Tuesday, this target implies upside of nearly 26%.

Analyst Michael Brown stated that the market underestimates the sustainability of Invesco's growth strategy, as well as the value of the stock. The consensus estimate for the company's growth rate in 2027 is 5.1%, with a slight pullback expected in 2028; whereas UBS forecasts that it can achieve steady growth of 5%-6% over the coming years.

Brown said the company has a diversified asset layout, owning the flagship ETF product QQQ, a China joint venture, and a solid business foundation in the Asia-Pacific region, creating multiple "growth engines" for the company. Brown wrote: "Leveraging the strong performance of its ETF business, Invesco is well positioned to enhance long-term organic growth; at the same time, it can utilize its diversified geographic business layout to achieve sustainable growth."

The stock was roughly flat in the latest session on Wednesday, but has gained nearly 16% year to date.