Jack Matten, an analyst from BMO Capital, maintained the Buy rating on Equitable Holdings (EQH – Research Report). The associated price target was raised to $72.00.
Jack Matten has given his Buy rating due to a combination of factors that highlight Equitable Holdings’ strategic improvements and financial outlook. The recent reinsurance transaction with RGA has allowed EQH to enhance its free cash flow (FCF) profile by divesting a more volatile and lower FCF conversion business segment. This move is expected to accelerate EQH’s earnings growth, particularly through its capital-light asset management operations, which are poised to benefit from the proceeds of over $2 billion.
Furthermore, Jack Matten notes that EQH’s FCF conversion rate is projected to improve to approximately 65% by 2026, reflecting a more stable business mix following the sale of its individual life business. The company is also targeting the upper range of its payout ratio, supported by a strong proforma excess capital position. Additionally, EQH’s EPS is anticipated to grow at a compound annual growth rate of 15% from 2022 to 2026, aligning with the high end of the company’s target range. These factors, combined with a favorable macroeconomic environment and increasing demand for retirement products, underpin the Buy rating.
In another report released today, Wells Fargo also maintained a Buy rating on the stock with a $62.00 price target.
Based on the recent corporate insider activity of 98 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of EQH in relation to earlier this year.