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The BofA Securities analyst emphasized the company’s improving credit fundamentals and attractive valuation, which is currently less than 7 times the projected 2026 Earnings Per Share (EPS), as key reasons for maintaining a Buy rating. This optimism is supported by OneMain’s strong year-to-date return of 10.09% and impressive one-year total return of 31.01%. The analyst’s commentary underlined the belief that OneMain’s stock remains a solid investment choice despite the mixed guidance and recent share price movement.
OneMain’s fourth-quarter Commercial & Industrial (C&I) Earnings Per Share (EPS) registered at $1.16, which was slightly below BofA Securities’ estimate of $1.18 but above the consensus of $1.15. The deviation from the estimated EPS was attributed to a higher provision expense, which reduced earnings by $0.05 per share, and a decrease in other income, costing another $0.03 per share. These negatives were largely counterbalanced by an increase in Net Interest Income (NII), which added $0.06 per share.
Despite the solid quarter, the company’s guidance did not meet the more optimistic expectations, with the broader market consensus leaning towards the higher end of OneMain’s projected range. This discrepancy led to a modest decline in OneMain’s stock following the earnings announcement. Trading at a P/E ratio of 12.26 and offering a substantial 7.25% dividend yield, OneMain presents interesting value metrics for investors. For deeper insights into OneMain’s valuation and growth potential, InvestingPro subscribers can access comprehensive financial analysis and additional ProTips.
The BofA Securities analyst emphasized the company’s improving credit fundamentals and attractive valuation, which is currently less than 7 times the projected 2026 Earnings Per Share (EPS), as key reasons for maintaining a Buy rating. This optimism is supported by OneMain’s strong year-to-date return of 10.09% and impressive one-year total return of 31.01%. The analyst’s commentary underlined the belief that OneMain’s stock remains a solid investment choice despite the mixed guidance and recent share price movement.
Investors and market watchers will continue to monitor OneMain’s performance closely, particularly in relation to the company’s ability to meet or exceed its future earnings projections and how this may impact the stock’s valuation and BofA Securities’ rating going forward.
In other recent news, OneMain Holdings (NYSE:OMF) reported its fourth quarter 2024 earnings, which slightly missed analyst expectations. The company’s adjusted diluted earnings per share were $1.16, falling a penny short of the $1.17 consensus estimate. Revenue for the quarter was $1.17 billion, just below the analyst consensus of $1.18 billion. These are some of the recent developments for the company.
In addition, OneMain’s Chairman and CEO Doug Shulman noted continued improvement in the company’s credit trends, which he believes positions the firm for increased profitability. Managed receivables for the quarter were reported at $24.7 billion. The company also declared a quarterly dividend of $1.04 per share.
For the full year 2024, OneMain reported net income of $509 million and earnings per diluted share of $4.24. These figures compare to $641 million and $5.32 per share, respectively, in 2023.
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