Key insights
- Evercore ISI reiterated an Outperform rating on AllianceBernstein (AB) following the Corebridge/Equitable merger, projecting a significant increase in AUM for AB by 2027. The merger expands AB's relationship with Nippon Life. AB's recent earnings surpassed expectations, with record AUM despite net outflows. The stock appears undervalued with a high dividend yield, suggesting a positive outlook for AB and potentially the asset management sector.
Investing.com - Evercore ISI reiterated an Outperform rating and $41.00 price target on AllianceBernstein (NYSE:AB) following the announcement of a merger between Corebridge and Equitable.
The merger creates a $22 billion market-cap company focused on retirement, life, wealth and asset management with $1.5 trillion in assets under management and administration. AllianceBernstein is majority owned by Equitable Holdings.
AllianceBernstein is expected to receive more than $100 billion in assets under management over the course of 2027. The assets consist of lower-fee fixed income AUM from Corebridge’s general account and separate accounts, which Evercore ISI estimates carry a low to mid-single digit fee rate blend.Trading at $37.31 with a P/E ratio of 12.64, the stock appears undervalued according to InvestingPro analysis. The company offers a compelling 10.46% dividend yield and has maintained dividend payments for 39 consecutive years, according to InvestingPro Tips.
The transaction excludes alternative and private markets mandates. AllianceBernstein remains on track toward its goal of $100 billion in alternative assets by 2027.
The merger expands AllianceBernstein’s relationship with Nippon Life, which now owns approximately 10% of the combined company. The development aligns with AllianceBernstein’s strategy to expand relationships with third-party insurers.
In other recent news, AllianceBernstein Holding L.P. reported fourth-quarter adjusted earnings that surpassed analyst expectations, with earnings per unit reaching $0.96. This figure exceeded Jefferies’ estimate of $0.90 and the consensus expectation of $0.92. Additionally, the company’s assets under management hit a record high of $866.9 billion, despite facing ongoing challenges with net outflows. In a significant development, AllianceBernstein is set to receive over $100 billion in assets under management from Corebridge Financial as part of a merger with Equitable Holdings. This merger will create a $22 billion retirement, life, and wealth and asset management company. Jefferies has adjusted its price target for AllianceBernstein to $38.00, down from $39.00, while maintaining a Hold rating on the stock. These recent developments highlight important changes and achievements for the company.
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