AllianceBernstein gains after Bofa turns bullish on flows, investment prospects

AllianceBernstein (NYSE:AB) gains as much as 1.3% after  Bank of America Securities analyst Michael Carrier upgrades the stock to Buy from Neutral on expectations of positive flows, improving investment performance, focus on efficiencies, and an attractive yield.

Says fixed income performance significantly weakened in H1 on sharp drop in high-yield emerging market and structured credit markets in Q1; that’s improved in the past three months, Carrier wrote.

“This improved performance should alleviate some of the negative impact of the weak 1st quarter on long-term performance numbers, in turn positioning the asset class for additional inflows over time, while other asset classes and strategies generally have had good long-term performance and flows,” he writes.

Also notes that AB’s unique tax structure and mid-single-digit tax rate isn’t expected to be affected by any future tax changes.

Lifts price target to $31 from $30.

Compares with Neutral Quant rating, Bullish average Wall Street analyst’s rating (2 Very Bullish, 2 Bullish, 4 Neutral).

See AllianceBernstein’s revenue, earnings from operations over the past five years: