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On Tuesday, Jefferies initiated coverage on Axos Financial (NYSE:AX), awarding the company a Buy rating and setting a price target of $90.00, representing a potential 25% upside from the current price of $71.94. The new rating is based on several key factors that highlight the company’s financial health and growth potential. According to InvestingPro data, Axos maintains a "GREAT" overall financial health score of 3.39 out of 5, supporting Jefferies’ positive outlook.
The firm’s analysts pointed to Axos Financial’s diversified deposit base and strong loan growth outlook as primary reasons for the positive rating. They also noted the company’s excess capital position as a contributing factor. With a P/E ratio of 9.59x and impressive revenue growth of 17.72% over the last twelve months, the analysts believe that Axos Financial’s valuation is attractive, particularly because it is currently trading at a discount compared to its peers.
Despite concerns over elevated levels of non-performing assets (NPAs) in recent quarters, Jefferies analysts remain confident in the company’s credit quality. They expect net charge-offs (NCOs) to be minimal, citing the majority of the company’s loans are real estate backed and have low loan-to-value ratios (LTVs), which typically indicates lower risk. InvestingPro subscribers can access 7 additional key insights about Axos’s financial health and growth prospects.
The financial institution’s two-year compound annual growth rate (CAGR) for loans and deposits through the first quarter of 2025 stands at 7.4% and 14.6%, respectively. This performance is notably strong when compared to the mid-cap peer group averages of 2.8% for loans and 2.3% for deposits.
The Buy rating and the $90 price target from Jefferies reflect a vote of confidence in Axos Financial’s business strategy and its capacity to continue growing amidst a competitive financial landscape.
In other recent news, Axos Financial reported strong third-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $1.81, compared to the forecasted $1.72. Revenue and net interest income showed year-over-year growth, with net interest income reaching $275 million, up 5.3% from the previous year. The company has also expanded its stock buyback program by $100 million, reflecting confidence in its stock value and commitment to shareholder returns. Additionally, DA Davidson adjusted its price target for Axos Financial shares to $84.00 from $88.00, while maintaining a Buy rating, citing the company’s strong quarterly performance and sound financial strategies.
The earnings call highlighted Axos Financial’s focus on strategic investments in technology and AI to enhance operational efficiency. The firm reported a promising loan growth pipeline and improved asset quality indicators, such as non-performing assets. The company’s efficiency ratio remains below 50%, with a commitment to controlling expenses relative to revenue growth. Axos Financial’s loan growth is expected to continue in the high single digits to low teens, supported by strategic innovations.
The company managed to keep operating expenses in check, with a slight increase of 0.6% from the prior quarter, and emphasized its strategic focus on expanding technology offerings. Axos Financial’s consolidated assets stood at approximately $24 billion, with total deposits increasing by 5.4% year-over-year to $20.1 billion. These developments indicate a robust financial strategy aimed at sustaining growth and maintaining a competitive edge in the financial sector.
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