Barclays has revised its price target for AllianceBernstein (AB, Financial), increasing it slightly to $37 from the previous $36. The investment firm maintains an Equal Weight rating on the stock. This adjustment follows AllianceBernstein's recent first-quarter report.
The company's forecast for performance fees did not meet Wall Street expectations, indicating potential challenges ahead. According to Barclays, ongoing macroeconomic volatility and current market conditions are likely to exert pressure on the firm's profit margins.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for AllianceBernstein Holding LP (AB, Financial) is $38.00 with a high estimate of $42.00 and a low estimate of $33.00. The average target implies an upside of 0.48% from the current price of $37.82. More detailed estimate data can be found on the AllianceBernstein Holding LP (AB) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, AllianceBernstein Holding LP's (AB, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for AllianceBernstein Holding LP (AB, Financial) in one year is $44.40, suggesting a upside of 17.4% from the current price of $37.82. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the AllianceBernstein Holding LP (AB) Summary page.
AB Key Business Developments
Release Date: February 06, 2025
- Adjusted Earnings Per Unit (EPU): $1.05 in Q4, up 36% year-over-year; $3.25 for full-year 2024, up 21% year-over-year.
- Net Revenues: $973 million in Q4, up 12% year-over-year; $3.5 billion for full-year 2024, up 5% year-over-year.
- Base Management Fees: Increased 17% in Q4; approximately $3 billion for full-year 2024, up 12% year-over-year.
- Performance Fees: $133 million in Q4; $227 million for full-year 2024, up 80% year-over-year.
- Total Operating Expenses: $619 million in Q4, flat year-over-year; $2.4 billion for full-year 2024, down 1% year-over-year.
- Compensation Ratio: 46% of adjusted net revenue in Q4, down from 47.7% prior year.
- Operating Margin: 36.4% in Q4, up 720 basis points year-over-year; 32.3% for full-year 2024, up 410 basis points year-over-year.
- Assets Under Management (AUM): $70 billion in private markets AUM as of year-end 2024, up 14% year-over-year.
- Net Inflows: Over $4 billion in 2024; $24 billion in active fixed income inflows, highest on record.
- Private Wealth Growth: 1% annualized rate in Q4; fourth consecutive year of organic growth.
- Occupancy-Related Savings: $50 million expected in 2025 from New York City office relocation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AllianceBernstein Holding LP (AB, Financial) achieved a record $24 billion in net inflows for its active fixed income platform in 2024, marking its highest year on record.
- The company successfully closed a joint venture with SocGen, monetizing value and eliminating a margin drag, while also relocating its New York City office to achieve $50 million in annual occupancy-related savings.
- AB's private markets platform grew by 14% in 2024, reaching $70 billion in assets under management, with significant contributions from partnerships like Equitable.
- The firm maintained a steady firm-wide fee rate, reflecting symmetrical growth between management fees and assets under management.
- AB's Retail channel extended its organic growth streak to six consecutive quarters, with annual sales reaching record levels and annual flows being the highest in three years.
Negative Points
- Active equity outflows persisted, totaling $7 billion in the fourth quarter and $24 billion throughout the year, with redemptions concentrated within institutions.
- Institutional redemptions accelerated in the final quarter of the year, driven by active equities and modest outflows in fixed income due to higher interest rates.
- The firm's one-year investment performance softened during the fourth quarter, with only 57% of assets under management outperforming over the past year.
- Despite strong performance in fixed income, elevated rates volatility affected taxable fixed income flows and AUM, leading to outflows in high-fee services.
- The company's effective tax rate is expected to increase to 6% to 7% in 2025, reflecting a more normalized taxable mix of earnings.
