On Monday, TD Cowen updated its stance on AllianceBernstein Holding L.P. (NYSE: NYSE:AB), raising the investment firm's stock price target from $36.00 to $40.00. The analyst maintained a Buy rating on the stock, signaling confidence in the company's prospects.
The adjustment in the price target reflects a variety of factors. AllianceBernstein's year-to-date (YTD) price performance, which has been strong both in absolute terms and relative to peers, was a key consideration. Additionally, the recent completion of the BRS JV disposition, a significant event for the firm, has now been factored into their valuation.
TD Cowen's analysis indicates that while their adjusted earnings per unit (EPU) estimates for 2024-2025 are mostly aligned with the general market consensus, there might be more significant positive developments in other areas that could surprise investors. The firm's current market performance and potential future earnings are seen as indicators of a solid total return potential.
The analyst also pointed out that if AllianceBernstein's board of directors and management decide to transition from a Master Limited Partnership (MLP) to a Corporation (C Corp), the current valuation could potentially undervalue the firm. The suggested price target of $40 implies that there is still room for growth, including a forward twelve-month (FTM) dividend yield of approximately 9%.
The new price target suggests that TD Cowen sees a favorable risk-reward scenario for investors, with the potential for both capital appreciation and income through dividends. AllianceBernstein's current performance and strategic decisions are expected to continue to play a significant role in the company's valuation going forward.
InvestingPro Insights
Adding to the positive outlook from TD Cowen, real-time data from InvestingPro further underscores the potential of AllianceBernstein Holding L.P. (NYSE: AB). The company's market capitalization stands at a robust $3.94 billion, and its price-to-earnings (P/E) ratio is currently at 14.67, suggesting that the stock is reasonably valued relative to earnings.
Moreover, the impressive dividend yield of 8.98% is particularly attractive to income-seeking investors, supported by the company's commendable history of maintaining dividend payments for 37 consecutive years. This consistency in rewarding shareholders is a testament to AllianceBernstein's stable financial footing and commitment to delivering shareholder value.
InvestingPro Tips highlight that, while analysts have revised their earnings estimates downwards for the upcoming period, the company is still expected to be profitable this year. Furthermore, the long-term profitability of AllianceBernstein is evidenced by its positive performance over the last twelve months. Investors may also take note of the company's weak gross profit margins, which could be an area for potential improvement or concern moving forward.
With additional insights available on InvestingPro, including more InvestingPro Tips, those considering an investment in AllianceBernstein can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. As of the latest update, there are 5 more InvestingPro Tips waiting for savvy investors at https://www.investing.com/pro/AB.
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