On Monday, TD Cowen showed confidence in AllianceBernstein Holding L.P. (NYSE: NYSE:AB) shares by increasing the price target to $42 from $41 while maintaining a Buy rating. The revision follows a recent investor visit with the company's management at their new headquarters in Nashville, Tennessee.
During the visit on November 20-21, TD Cowen noted that AllianceBernstein's fundamental story continues to be robust. The firm's long-term net new assets annual organic growth rate (LT NNA AOGR) is expected to gather pace heading into 2025. This positive outlook is based on the firm's performance and growth strategies discussed during the investor meetings.
In addition to the growth prospects, the analyst highlighted that AllianceBernstein's management appears more open to the idea of a potential conversion into a C-Corporation. However, it was noted that such a transition remains complex and is not anticipated in the short term. The possibility of this structural change has been a point of interest for investors considering the tax and regulatory implications it could have for the company.
The analyst also introduced estimates for the year 2026, which align with the firm's growth trajectory and the potential for a C-Corp conversion in the future. The new price target of $42 reflects the analyst's confidence in the company's ability to achieve its projected growth and operational goals.
AllianceBernstein, as a global asset management firm, has been closely watched by investors for its strategic moves and performance in the competitive financial market. The company's shares are traded on the New York Stock Exchange, where market participants will be monitoring the impact of TD Cowen's updated price target and the ongoing discussions around a C-Corp conversion.
In other recent news, AllianceBernstein has made significant strides in its financial performance. The firm's earnings and revenue results have been impressive, surpassing $800 billion in assets under management (AUM), a milestone achieved through consistent net inflows over three consecutive quarters and substantial growth in its private markets platform.
AllianceBernstein has also entered into a partnership with Reinsurance Group (NYSE:RGA) of America to expand its insurance business, with the firm becoming a key investor in Ruby Reinsurance Company. This merger is a strategic move in strengthening AllianceBernstein's position in insurance asset management.
In addition to these major developments, AllianceBernstein's private markets platform has expanded to $68 billion AUM, with a future target of $100 billion. Despite some redemptions in active equity strategies, the firm achieved its highest quarterly retail inflows since 2021.
The firm's plans to scale existing funds, launch new products, and expand teams, especially in private credit, indicate a continued focus on its growth strategy. These are recent developments that suggest AllianceBernstein is making consistent progress in its operations and strategic initiatives.
InvestingPro Insights
AllianceBernstein's strong fundamentals, as highlighted by TD Cowen, are further supported by real-time data from InvestingPro. The company's P/E ratio of 10.23 suggests it may be undervalued relative to its earnings potential, aligning with the analyst's bullish outlook. This is reinforced by an InvestingPro Tip indicating that AB is trading at a low P/E ratio relative to its near-term earnings growth.
Investors may find AB's dividend yield of 8.66% particularly attractive, especially given the InvestingPro Tip that the company has maintained dividend payments for 37 consecutive years. This consistent dividend history, coupled with a significant 26.23% dividend growth over the last twelve months, underscores the company's commitment to shareholder returns.
The company's profitability is evident from its impressive 100% gross profit margin and operating income margin for the last twelve months as of Q3 2024. This financial strength is complemented by a robust return on assets of 19.51%, indicating efficient use of the company's assets to generate profits.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 6 more InvestingPro Tips available for AllianceBernstein, providing a deeper understanding of the company's financial health and market position.
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