The case for & against
Bull & Bear analysis
Bullish
Equitable Holdings, Inc. (NYSE: EQH) operates in the financial services sector, focusing on providing retirement, life insurance, institutional, and asset and wealth management services. The company is currently positioning itself for growth through a significant merger with CoreBridge Financial, aiming to leverage its broad distribution network and suite of product solutions to capitalize on favorable market dynamics. With 92.7% of its shares held by institutional investors, EQH benefits from a strong backing while navigating a challenging revenue landscape.
Bull says
- ↑Reported $1.70 non-GAAP EPS, up 24% YoY and on track for >15% growth by 2026
- ↑CoreBridge merger poised to expand distribution breadth and drive cost synergies
- ↑Returned $449 M to shareholders in Q2 via dividends and buybacks at a 92% payout ratio
- ↑AUM rose 10% YoY to $1.2 T with $1.7 B retirement and $2 B advisory net inflows
- ↑Institutional investors hold 92.7% of shares, underpinning strategic stability
- ↑Favorable factor profile with high earnings yield and strong momentum
Bear says
- ↓Revenue declined 29.8% YoY to $1.66 B, signaling potential value-trap dynamics
- ↓Low profitability hinders the firm’s ability to convert revenue into sustainable profits
- ↓High 92% payout ratio limits reinvestment capacity for future growth
- ↓CoreBridge merger faces integration complexity and regulatory approval risks
- ↓Intense RILA competition could compress margins and erode market share
- ↓Interest-rate volatility threatens net interest margin stability
Investment themes with EQH
High Dividend Yield↓ -0.51%
Companies paying above-average dividends
AVGO · JPM · XOM
Buybacks↓ -0.29%
Companies repurchasing their own shares
C · JCI · WFC
Earnings Call · Q1 2024 · Mgmt. Guidance
Updated 05-02-2025bullish
Transcript signals
Bull points
- We expect similar returns in the second quarter. The caveat being real estate equity, that's been under some pressure due to rates increasing. For the full year, we still expect to be slightly below our 8% to 12% as long as equity markets maintain at these levels as the growth funds will continue to outperform relative to the real estate equity. So we're quite comfortable with the asset class over the long term.
- Equitable Holdings reported non-GAAP operating earnings of $490 million in the quarter or $1.43 per share, up 49% year-over-year.
- non-GAAP EPS ex notable items was also $1.43 per share.
Bear points
- we saw slightly higher surrenders, but we're retaining almost 50% of it through Equitable advisers. The growth in earnings is sustainable. We've seen it across time.
- Similar to the industry, higher interest rates have had an impact on net flows. Within the broader Group Retirement market, we saw higher outflows primarily coming from our corporate line and discontinued other higher account balances driven by higher equities and then older-aged clients that had asset concentrations in the general investment options sleeve, which receives guaranteed rates.
- Similar to the industry, higher interest rates have had an impact on net flows. Within the broader Group Retirement market, we saw higher outflows primarily coming from our corporate line and discontinued other higher account balances driven by higher equities and then older-aged clients that had asset concentrations in the general investment options sleeve, which receives guaranteed rates.
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