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Investing.com - Goldman Sachs downgraded AllianceBernstein (NYSE:AB) stock rating to Neutral from Buy on Thursday, maintaining a price target of $40.00, which is approximately in line with the current share price of $40.90. The stock is trading near its 52-week high of $41.86, though InvestingPro analysis suggests the stock may still be undervalued.
The downgrade comes despite Goldman Sachs acknowledging AllianceBernstein’s relatively strong positioning, including its growing presence in Private Markets, partnership with Equitable, and better-than-peer average growth in traditional liquid products. The company maintains a robust financial health score of 3.46/5 according to InvestingPro, and notably has maintained dividend payments for 38 consecutive years, currently offering an attractive 7.9% yield.
Goldman Sachs cited emerging signs of slowing organic growth across both Equities and Fixed Income segments, which could potentially offset benefits from the company’s structurally stronger growth areas such as Private Markets.
The investment bank expects AllianceBernstein’s organic growth to remain negative through 2026 before turning positive at approximately 1% in 2027, according to its analysis.
Goldman Sachs also lowered its earnings estimates for AllianceBernstein to $3.30, $3.58, and $3.99 for 2025, 2026, and 2027 respectively, noting the stock’s year-to-date outperformance of 9% and its current trading at 12 times next-twelve-months price-to-earnings ratio, which aligns with historical valuation.
In other recent news, AllianceBernstein Holding L.P. reported its first-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share of $0.80 compared to the forecast of $0.79. The company announced net revenues of $838 million, which, despite a 5% decrease year-over-year, showed a 6% increase on a like-for-like basis. AllianceBernstein’s assets under management rose to $803 billion in May 2025, up from $781 billion in April, driven primarily by market appreciation. The firm experienced slight inflows in its private wealth channel, although institutional and retail channels saw outflows. In a significant board update, AllianceBernstein announced that Jeff Hurd resigned from the Board of Directors, and Robin Raju was appointed as a new Non-Independent Director. Additionally, the firm reported a notable increase in equity assets, which rose to $332 billion from $315 billion in April. In terms of analyst activity, there is no specific upgrade or downgrade reported, but the firm’s strong financial performance indicates positive sentiment.
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