On Thursday, CFRA raised the stock price target for AXA Equitable Holdings Inc (NYSE:EQH) to $45.00 from $43.00, while maintaining a Buy rating on the stock. The adjustment reflects a valuation of EQH shares at 6.2 times the firm's projected 2025 operating earnings per share (EPS) of $7.25 and 7.3 times the 2024 EPS estimate of $6.20.
The latter was revised downward by $0.10. This new target compares to the stock's three-year average forward multiple of 5.2 times and a peer average of 8.4 times.
The company reported a first-quarter operating EPS of $1.43, surpassing the previous year's $0.96 and coming in above the consensus estimate of $1.32 but below CFRA's expectation of $1.53. The results were driven by an 11% increase in operating revenues and a 14% rise in Individual Retirement profits, attributed to improved fund flow trends. Moreover, Group Retirement profits soared by 42% due to an expanded net interest margin and growth in fee income.
The positive performance extended across the company's divisions, with AllianceBernstein (NYSE:AB) seeing a 7% profit increase, Protection Solutions profits recovering on better claim trends, and Wealth Management profits jumping 34% on a 22% increase in assets under administration. CFRA praised the company's financial results and anticipates 8%-12% operating revenue growth in 2024 and a 7%-10% increase in 2025.
CFRA believes that AXA Equitable's above-peer top-line growth and improved margin trends will act as a catalyst for the stock, potentially narrowing the valuation gap with its peers. The firm's outlook for the company is positive, expecting continued revenue growth and margin improvement in the coming years.
InvestingPro Insights
AXA Equitable Holdings Inc (NYSE:EQH) has shown a robust financial performance that has caught the attention of investors and analysts alike. In line with CFRA's positive outlook, InvestingPro data underscores the company's strong market position, with a notable market capitalization of $12.55B and a solid price to earnings (P/E) ratio of 11.27, indicating investor confidence in its earnings capacity.
The company's commitment to returning value to shareholders is evident through a high shareholder yield and a consistent dividend growth, having raised its dividend for 6 consecutive years. The stock's impressive one-year total return of 59.23% further reflects its strong market performance.
Investors looking for additional insights can explore more InvestingPro Tips for EQH, which highlight the company's aggressive share buyback strategy and its trading near the 52-week high, suggesting a bullish sentiment among market participants. With 4 analysts revising their earnings upwards for the upcoming period, the company's prospects appear promising.
For those interested in gaining a deeper understanding of AXA Equitable's potential, InvestingPro offers additional tips to guide investment decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and find out more about the 11 additional tips available at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.