### BUSINESS

AllianceBernstein Holding L.P. is publicly owned investment manager. The firm also provides research services to its clients. It provides its services to investment companies, pension and profit sharing plans, banks and thrift institutions, trusts, estates, government agencies, charitable organizations, individuals, corporations, and other business entities. The firm invests in public equity, fixed income, and alternative investment markets across the globe. It employs long/short strategy to make its investments. The firm conducts in-house research to make its investments. AllianceBernstein Holding L.P. was founded in 1987 and is based in New York, New York.

### INVESTMENT RATING

** Reflecting future returns on capital that are forecasted to be above the cost of capital, AB is expected to continue to be a major Value Builder. **

** AllianceBernstein Holding has a current Value Trend Rating of C (Low Neutral). **

The Value Trend Rating reflects consistent signals from PTR’s two proprietary measures of a stock’s attractiveness. AllianceBernstein Holding has a slightly negative Appreciation Score of 36 and a neutral Power Rating of 57, triggering the Low Neutral Value Trend Rating.

** AllianceBernstein Holding’s stock is selling at targeted value. ** The current stock price of $33.84 compares to targeted value 12 months forward of $34.

This moderately low appreciation potential results in an appreciation score of 36 (64% of the universe has greater appreciation potential.)

** AllianceBernstein Holding has a Power Rating of 57. ** (This neutral Power Rating indicates that AB’s chances of enjoying attractive investment performance over the near to intermediate term are only average.)

Factors contributing to this neutral Power Rating include: the recent trend in AB’s earnings estimates has been favorable; and recent price action has been neutral. An offsetting factor is the Investors, NEC comparison group is in a slightly weakened position currently.

### INVESTMENT PROFILE

AB’s financial strength is high. Financial strength rating is 87.

** Relative to the S&P 500 Composite, AllianceBernstein Holding LP has neutral Growth/Value characteristics; its appeal is likely to be to investors heavily oriented toward Income; the perception is that AB is lower risk. ** All factors are relative strengths. AB’s valuation is low: high dividend yield, low P/E ratio, and low price/book ratio. AB has unusually low market capitalization.

### CURRENT SIGNALS

** AllianceBernstein Holding’s current operations are eroding. ** Return on equity is falling, reflecting: falling asset utilization; declining pretax margin; falling tax keep rate; and falling leverage.

** AllianceBernstein Holding’s current technical position is mixed. ** The stock price is in a 3.5 month up move. The stock has appreciated 27.5% from its prior low. The 200 day moving average is in a downtrend. The stock price is above its 200 day moving average.

### ALERTS

Significant positive changes in fundamentals have recently occurred for AllianceBernstein Holding LP (NYSE: AB): the consensus estimate for December, 2025 increased significantly, the consensus estimate for December, 2024 increased significantly, and significant quarterly earnings acceleration occurred.

The stock is currently rated C.

AllianceBernstein Holding LP (NYSE: AB) stock rose modestly by 0.7% on 3/6/24. The stock closed at $33.84. Trading volume in this advance was normal. The stock has performed in line with the market over the last nine months and is unchanged during the last week.

### CASH FLOW

** In 2023, AllianceBernstein Holding LP experienced a very significant reduction in cash of $0.0 million (). Sources of cash were much lower than uses. ** Cash generated from 2023 EBITDA totaled +$299.8 million. 2023 non-operating sources contributed no cash. Cash taxes consumed -$35.6 million (-12% of EBITDA). Re-investment in the business amounted to -$3.2 million (-1% of EBITDA). In 2023, debt investors had no impact on cash while equity investors removed -$260.9 million (-87% of EBITDA).

** AB’s Non-operating Income, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by stability for the Alliancebernstein Holding Lp Peer Group as well. In most years, AllianceBernstein Holding LP was in the third quartile and second quartile. Currently, AllianceBernstein Holding LP is substantially below median at 0% of EBITDA ( $0.0 million).

** AB’s Cash Taxes, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by stability for the Alliancebernstein Holding Lp Peer Group as well. In most years, AllianceBernstein Holding LP was in the second quartile and third quartile. Currently, AllianceBernstein Holding LP is slightly above median at -12% of EBITDA (-$35.6 million).

** AB’s Business Re-investment, %EBITDA has suffered a volatile overall downtrend over the period. ** This downtrend was accompanied by an opposite trend for the Alliancebernstein Holding Lp Peer Group. In most years, AllianceBernstein Holding LP was in the top quartile and second quartile. Currently, AllianceBernstein Holding LP is slightly above median at -1% of EBITDA (-$3.2 million).

** AB’s Debt Investors, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by a downtrend for the Alliancebernstein Holding Lp Peer Group. In most years, AllianceBernstein Holding LP was in the third quartile and top quartile. Currently, AllianceBernstein Holding LP is upper quartile at 0% of EBITDA ( $0.0 million).

** AB’s Equity Investors, %EBITDA has enjoyed a volatile overall uptrend over the period. ** This improvement was accompanied by an opposite trend for the Alliancebernstein Holding Lp Peer Group. In most years, AllianceBernstein Holding LP was in the lower quartile and third quartile. Currently, AllianceBernstein Holding LP is lower quartile at -87% of EBITDA (-$260.9 million).

** AB’s Change in Cash, %EBITDA has exhibited little to no overall change over the period. ** This stability was accompanied by a downtrend for the Alliancebernstein Holding Lp Peer Group. In most years, AllianceBernstein Holding LP was in the third quartile and second quartile. Currently, AllianceBernstein Holding LP is below median at 0% of EBITDA ( $0.0 million).

** AB’s Cash, %Revenue has exhibited little to no overall change over the period. ** This stability was accompanied by stability for the Alliancebernstein Holding Lp Peer Group as well. In most years, AllianceBernstein Holding LP was in the lower quartile. Currently, AllianceBernstein Holding LP is lower quartile at 0%.

### PROFITABILITY

** AB’s return on equity has improved modestly since 2014. The current level of 12.7% is 1.15X the low for the period and is -9.5% from the high. **

The productivity of AB’s assets rose over the full period 2014-2023: asset turnover has exhibited a volatile overall uptrend although it experienced a very sharp decline after the 2021 high.

** AB’s return on equity is below median (12.7%) for the four quarters ended December, 2023. **

Operating performance (pretax return on assets) is above median (14.4%) reflecting asset turnover that is below median (0.14X) and upper quartile pretax margin (100.0%).

Tax “keep” rate (income tax management) is above median (88.1%) resulting in after tax return on assets that is above median.

Financial leverage (leverage) is lower quartile (1.00X).

### GROWTH RATES

Overall, AllianceBernstein Holding LP’s growth rate has slowed considerably in recent years.

AllianceBernstein Holding LP’s historical income statement growth has been in line with balance sheet growth. Revenue growth has paralleled asset growth; earnings growth has paralleled equity growth.

** Annual revenue growth ** has been 4.0% per year. (More recently it has been -9.6%.)

** Total asset growth ** has been 2.2% per year. (More recently it has been 7.6%.)

** Annual E.P.S. growth ** has been 4.7% per year.

** Equity growth ** has been 2.1% per year. (More recently it has been 7.7%.)

** AllianceBernstein Holding LP’s consensus growth rate forecast (average of Wall Street analysts) ** is 14.3% — substantially above the average of the historical growth measures.

** Relative to the Alliancebernstein Holding Lp Peer Group, AllianceBernstein Holding LP’s historical growth measures are consistently third quartile. ** Revenue growth (4.0%) has been below median. Equity growth (2.1%) has been below median. E.P.S. growth (4.7%) has been at the lower quartile. Total asset growth (2.2%) has been at the lower quartile.

** In contrast, consensus growth forecast (14.3%) is upper quartile. **

### PRICE HISTORY

** Over the full time period, AllianceBernstein Holding LP’s stock price performance has been significantly below market. ** Between May, 2013 and March, 2024, AllianceBernstein Holding LP’s stock price rose +34%; relative to the market, this was a -57% loss. Significant price moves during the period: 1) March, 2020 – October, 2021: +203%; and 2) January, 2016 – January, 2020: +78%.

### TOTAL INVESTMENT RETURNS

** Current annual total return performance of -11.0% is lower quartile relative to the S&P 500 Composite. **

In addition to being lower quartile relative to S&P 500 Composite, current annual total return performance through February, 2024 of -11.0% is lower quartile relative to AllianceBernstein Holding LP Peer Group.

** Current 5-year total return performance of 10.6% is slightly above median relative to the S&P 500 Composite. **

Through February, 2024, with slightly above median current 5-year total return of 10.6% relative to S&P 500 Composite, AllianceBernstein Holding LP’s total return performance is substantially above median relative to AllianceBernstein Holding LP Peer Group.

### VALUATION BENCHMARKS

** Relative to S&P 500 Composite, AB’s overall valuation is low. ** The highest factor, the ratio of enterprise value/revenue, is upper quartile. Ratio of enterprise value/assets is slightly above median. Ratio of enterprise value/earnings before interest and taxes is lower quartile. Price/earnings ratio is lower quartile. The lowest factor, the price/equity ratio, is at the lower quartile.

** Relative to AllianceBernstein Holding LP Peer Group, AB’s overall valuation is high. ** The highest factor, the ratio of enterprise value/assets, is at the upper quartile. Ratio of enterprise value/earnings before interest and taxes is slightly above median. Ratio of enterprise value/revenue is upper quartile. Price/equity ratio is slightly above median. The lowest factor, the price/earnings ratio, is slightly above median.

** AllianceBernstein Holding LP has a large value gap compared to the median valuation. ** For AB to achieve median valuation, its current ratio of enterprise value/revenue would have to fall from the current level of 12.92X to 11.46X. If AB’s ratio of enterprise value/revenue were to fall to 11.46X, its stock price would be lower by $-4 to $30.

For AB to fall to lower quartile valuation relative to the AllianceBernstein Holding LP Peer Group, its current ratio of enterprise value/revenue would have to fall from the current level of 12.92X to 5.95X. If AB’s ratio of enterprise value/revenue were to fall to 5.95X, its stock price would decline by $-18 from the current level of $34.

### VALUE TARGETS

** Reflecting future returns on capital that are forecasted to be above the cost of capital, AB is expected to continue to be a major Value Builder. **

AllianceBernstein Holding LP’s current Price Target of $33 is little changed from the current price of $33.84.

This moderately low appreciation potential results in an appreciation score of 36 (64% of the universe has greater appreciation potential.)

Reinforcing this moderately low Appreciation Score of 36, the neutral Power Rating of 57 contributes to an Value Trend Rating of C.

** AllianceBernstein Holding LP’s current Price Target is $33 (-23% from the 2023 Target of $43 and -2% from the 03/06/24 price of $33.84). ** This fall in the Target is the result of a -4% decrease in the equity base and a -19% decrease in the price/equity multiple. The forecasted increase in cost of equity has a very large negative impact on the price/equity multiple and the forecasted decline in growth has a very large negative impact as well. Partially offsetting these Drivers, the forecasted increase in return on equity has a very large positive impact.

** PTR’s return on equity forecast is 20.8% — above our recent forecasts. ** Forecasted return on equity enjoyed a dramatic, erratic increase between 2015 and 2023. The current forecast is significantly above the 2016 low of 11%.

** PTR’s growth forecast is 0.0% — below our recent forecasts. ** Forecasted growth enjoyed a dramatic, erratic increase between 2015 and 2023. The current forecast is well below the 2022 peak of 8%.

** PTR’s cost of equity forecast is 11.5% — slightly above recent levels. ** Forecasted cost of equity suffered a dramatic, erratic increase between 2015 and 2023. The current forecast is well above the 2015 low of 4.4%.

At AllianceBernstein Holding LP’s current price of $33.84, investors are placing a negative value of $-3 on its future investments. This view is not supported by the company’s most recent performance that reflected a growth rate of 6.0% per year, and a return on equity of 12.2% versus a cost of equity of 7.5%.

PTR’s 2025 Price Target of $33 is based on these forecasts and reflects an estimated value of existing assets of $35 and a value of future investments of $-2.

## Be the first to comment