A few months back analysts cited takeover rumors as the reason for Amvescap’s rising stock price. Now they are pointing to the fund manager's plans to cut operating costs. Amvescap shares jumped 3.7 percent on the London Exchange Friday after Morgan Stanley raised its outlook on the stock.

The underwriter said "We see a much larger opportunity for cost cutting at Amvescap than the market is penciling in." It also warned that it sees not end to the outflows from Amvescap's funds.

"We still think retail flows will be slow to turn in Amvescap's AIM division, and Janus suggests even with better performance, retail outflows can be relentless," said the report.

Amvescap has spent the past two years taking costs out of its funds by merging its Invesco Funds brand into AIM and then cutting its Invesco sales force, among other moves. It looks like the Street wants more such moves.  

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