On January 5, Zacks Investment Research upgraded AllianceBernstein Holding L.P. (AB) to a Zacks #1 Rank (Strong Buy).
Why the Upgrade?
AllianceBernstein has been witnessing rising earnings estimates on the back of strong third-quarter 2012 results. Moreover, this well-known investment manager delivered positive earnings surprises in 3 of the last 4 quarters. The long-term expected earnings growth rate for this stock is 6.3%.
AllianceBernstein reported third-quarter results on October 24. Adjusted earnings per share came in at 36 cents, surpassing the Zacks Consensus Estimate of 27 cents by 33.3% and year-ago earnings of 30 cents by 20.0%.
Notably, the company’s Distribution per unit came in at 36 cents, reflecting 38.0% increase over the prior-year quarter.
Earnings were primarily aided by solid operating income year-over-year growth of 8.0%, partially offset by a 35.0% increase in operating expenses. Total net outflows of $4.4 billion also significantly reduced from $11.0 billion recorded in the prior-year period. However, net revenues stood at $574.0 million, down 5.0% year over year.
Currently, AllianceBernstein reported its preliminary assets under management (:AUM) of $426.0 billion for the month of November 2012, up 1.7% over the prior month, reflecting continued net inflows.
The Zacks Consensus Estimate for 2012 increased 16.2% to $1.22 per share over the last 90 days. For 2013, the Zacks Consensus Estimate jumped 17.5% to $1.41 per share over the same time frame.
Other Stocks to Consider
BlackRock, Inc. (BLK) and Franklin Resources Inc. (BEN) are the other investment management companies with a Zacks #2 Rank (Buy).
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