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Investing.com - Needham raised its price target on Axos Financial (NYSE:AX) to $92.00 from $88.00 on Wednesday, while maintaining a Buy rating on the $4.42 billion market cap financial services company. Currently trading at $78.32, Axos has demonstrated strong momentum with a 34% return over the past year, according to InvestingPro data.
The price target increase follows Axos Financial’s 8-K filing on Tuesday, which detailed the tax impacts of California’s recently signed state budget. The new budget changes how financial institutions are taxed in California, moving to a single-factor apportionment based on revenue generated within the state.
This tax change is expected to reduce Axos Financial’s effective tax rate by approximately 3% on a run rate basis, which Needham estimates will add $0.30 to the company’s annualized earnings per share.
Needham noted that while the California proposal was likely intended to increase tax receipts for the state, Axos Financial’s corporate structure will actually benefit from the change. The company maintains significant headcount in California but operates with a national lending footprint.
The research firm believes this tax benefit will further strengthen Axos Financial’s earnings power and returns on capital, supporting its decision to raise the price target while maintaining its Buy rating.
In other recent news, Axos Financial reported its third-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.81, compared to the forecasted $1.72. The company also experienced year-over-year growth in revenue and net interest income, with net income rising to $105.2 million. In addition to strong earnings, Axos Financial announced a $100 million increase in its stock buyback program, reflecting confidence in its stock value and commitment to shareholder returns. Analyst firms have shown a positive outlook on Axos Financial, with Needham reiterating a Buy rating and Jefferies initiating coverage with a Buy rating and a $90 price target, emphasizing the company’s strong loan growth and diversified deposit base. However, DA Davidson adjusted its price target to $84 while maintaining a Buy rating, citing Axos Financial’s strong quarterly performance and sound financial strategies. The company continues to focus on growth, supported by strategic investments in technology and AI, and expects loan growth to continue in the high single digits to low teens.
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