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Equitable Holdings, Inc. Annual Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

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·4 min read
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It's been a mediocre week for Equitable Holdings, Inc. (NYSE:EQH) shareholders, with the stock dropping 20% to US$21.45 in the week since its latest yearly results. Revenues came in at US$9.6b, a whole 28% below what analysts were forecasting. Losses were a (relative) bright spot by comparison, with a per-share (statutory) loss of US$3.51 substantially smaller than what analysts had expected. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Equitable Holdings after the latest results.

View our latest analysis for Equitable Holdings

NYSE:EQH Past and Future Earnings, February 28th 2020
NYSE:EQH Past and Future Earnings, February 28th 2020

Taking into account the latest results, the latest consensus from Equitable Holdings's seven analysts is for revenues of US$14.0b in 2020, which would reflect a sizeable 46% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Equitable Holdings forecast to report a statutory profit of US$3.33 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$13.8b and earnings per share (EPS) of US$3.09 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$29.18, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Equitable Holdings at US$36.00 per share, while the most bearish prices it at US$25.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. For example, we noticed that Equitable Holdings's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 46%, well above its historical decline of 5.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue grow 3.9% per year. Although Equitable Holdings's revenues are expected to improve, it seems that analysts are also expecting it to grow faster than the wider market.

The Bottom Line

The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Equitable Holdings following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Equitable Holdings going out to 2022, and you can see them free on our platform here..

You can also see our analysis of Equitable Holdings's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.