On Wednesday, Truist Securities adjusted its outlook on AXA Equitable Holdings Inc (NYSE:EQH), raising the price target to $52.00 from the previous $44.00, while reiterating a Buy rating on the stock. The revision follows a slight alteration in the firm's earnings per share (EPS) estimate for the year 2024, which has been reduced to $6.05 from $6.10, accounting for minor underperformance in the recent quarter. However, the firm's forecast for 2025 remains unchanged at $7.15 per share.
The new price target of $52 is based on the valuation of Equitable's stake in AllianceBernstein (NYSE:AB) at $6.2 billion, and the rest of the company is valued at 6.0 times its non-AB earnings of $1.7 billion. According to Truist Securities, this valuation places the company at the lower end of the spectrum compared to its peers in the Life insurance group.
The revised valuation implies a total company value of $16.4 billion, divided by an estimated 316 million shares, resulting in the updated per share target. The adjustment reflects the company's performance excluding notable items that affected the quarter's results. Despite the slight EPS estimate reduction for 2024, the firm's confidence in the stock remains, as evidenced by the maintained Buy rating.
Truist Securities' update follows a detailed analysis of AXA Equitable Holdings' financials and market positioning. The price target uplift indicates the firm's anticipation of the stock's potential to perform well in the market.
In other recent news, AXA Equitable Holdings has seen several developments. Truist Securities raised its price target for the company to $52.00, maintaining a Buy rating despite a slight decrease in the 2024 earnings per share (EPS) estimate to $6.05. This was due to a minor underperformance in the recent quarter, but the firm's 2025 EPS forecast remains steady at $7.15 per share.
Simultaneously, UBS downgraded AXA Equitable Holdings to a Neutral rating from its previous Buy status, while raising the price target to $43.00. The 2025 estimated EPS was modestly increased to $7.30, citing a slightly higher investment yield. However, sales momentum for annuity products is expected to decelerate due to anticipated lower long-term interest rates.
In addition, Equitable Holdings secured $600 million through the issuance and sale of Pre-Capitalized Trust Securities, part of a long-term funding strategy. This coincided with a tender offer to repurchase up to $500 million of its outstanding debt securities, contingent on the successful completion of related transactions.
Furthermore, CFRA raised the stock price target for AXA Equitable Holdings, reflecting robust earnings. The company reported a first-quarter operating EPS of $1.43, surpassing the previous year's $0.96. CFRA anticipates 8%-12% operating revenue growth in 2024 and a 7%-10% increase in 2025. These recent developments highlight the company's financial performance and strategic initiatives.
InvestingPro Insights
As Truist Securities updates its outlook on AXA Equitable Holdings Inc, real-time data from InvestingPro provides additional context for investors considering the company's stock. The current Market Cap stands at $14.21 billion, reflecting the company's substantial size in the financial sector. With a P/E Ratio of 17.71 and an adjusted P/E Ratio for the last twelve months as of Q1 2024 at 12.24, investors can gauge the company's earnings relative to its share price. Notably, the Price / Book ratio is quite high at 30.18, which could suggest that the market values the company's assets highly or that the stock is potentially overvalued relative to its book value.
InvestingPro Tips that are particularly relevant to this article include the management's aggressive share buybacks and the six consecutive years of dividend raises, which may signal confidence from the company's leadership and a commitment to returning value to shareholders. Moreover, the company's liquid assets exceeding short-term obligations provide a cushion for financial stability. It is also worth mentioning that 7 analysts have revised their earnings downwards for the upcoming period, which may warrant caution for those with a short-term investment horizon. For those interested in a deeper dive, there are 11 additional tips available on InvestingPro's platform that could further inform investment decisions.
Investors may also consider the recent strong returns, with a one-year price total return of 54.74% and the stock trading near its 52-week high, which is 98% of the peak price. This could either indicate a strong momentum that investors might want to capitalize on or a potential reevaluation if they are concerned about buying at the top. The dividend yield stands at 2.22%, accompanied by a significant dividend growth of 20.0% for the last twelve months as of Q1 2024, which could appeal to income-focused investors.
Overall, the InvestingPro data and tips provide a multifaceted view of AXA Equitable Holdings Inc that complements the analysis provided by Truist Securities, offering investors a more comprehensive basis for their investment decisions.
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