Amidst recent financial market turbulence, AllianceBernstein (NYSE:AB) and BlackRock (NYSE:NYSE:BLK) have been identified as resilient asset managers by Craig Siegenthaler, an analyst from Bank of America. Siegenthaler has set one-year target prices for AB and BlackRock at $44 and $858 respectively on Wednesday.
AllianceBernstein is poised for a reversal from a $4 billion net outflow to a $2 billion inflow for Q3. The firm's significant size and scale, coupled with its investment diversification, have been highlighted as key factors in its competitive advantage within the asset-management industry, as per Morningstar's review. According to InvestingPro's real-time metrics, AllianceBernstein's market cap stands at $3480M USD and its return on assets is a robust 14.15% LTM2023.Q2. The firm has also been profitable over the last twelve months, as pointed out by InvestingPro Tips.
BlackRock, acclaimed for its industry-leading bond ETF business and substantial revenue from iShares exchange-traded funds, is expecting increased net inflows and long-term flows growth. This growth is anticipated to be supported by rising short-term interest rates. Morningstar's assessment of BlackRock underscores its unique ability to navigate the challenges traditional asset managers are currently facing. BlackRock's resilience is further evidenced by its high return on invested capital and the fact that it has raised its dividend for 13 consecutive years, as noted by InvestingPro Tips. The company also boasts a substantial market cap of $95.03B USD and a P/E ratio of 18.37, according to InvestingPro's real-time metrics.
Siegenthaler forecasts an upward trend in BlackRock's long-term flows in Q4, continuing into 2023 and 2024. He also predicts that passive investments will capture 60% to 70% of the fixed income rebalancing wave in 2024, following the Federal Reserve's cessation of rate hikes.
Both firms are well-positioned for fixed income reallocations after the final Fed rate hike, according to Morningstar's assessments and fair value estimates. This resilience amidst financial-market volatility is largely credited to improved equity and fixed income iShares flows and positive money-market fund flows. For more insights and tips like these, you may want to look into the InvestingPro product that includes additional tips. You can find more information here.
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