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TD Cowen raised its price target on OneMain Holdings (NYSE:OMF) to $60.00 from $56.00 on Tuesday, while maintaining a Buy rating on the consumer finance company’s stock. According to InvestingPro data, the company currently trades at an attractive P/E ratio of 11.17x and offers a substantial 7.87% dividend yield.
The research firm cited OneMain’s combination of an extensive branch network and leading online capabilities as key drivers for profitable growth. TD Cowen noted that the company underwrites loans to remain profitable even during severe economic downturns. With a market capitalization of $6.29 billion and strong financial health metrics according to InvestingPro, OneMain has demonstrated resilience in various market conditions.
OneMain’s credit headwinds from pre-tightening vintages are still affecting performance but should decrease more noticeably in the future, according to TD Cowen. The firm believes post-tightening loan vintages are performing in line with pre-pandemic levels. InvestingPro reveals that 9 analysts have revised their earnings upward for the upcoming period, suggesting growing confidence in the company’s outlook. Subscribers can access additional ProTips and detailed financial analysis on the platform.
The research firm highlighted that OneMain is now growing loan originations as competition has remained favorable, resulting in stronger balance sheet growth. TD Cowen also pointed to the company’s well-established funding program that provides flexibility and competitive costs compared to peers.
TD Cowen mentioned that OneMain’s business faces relatively low regulatory risks as it caps annual percentage rates at 36%, and noted that the company’s pursuit of an industrial loan company charter should help with growth in future years.
In other recent news, OneMain Holdings reported strong financial results for the first quarter of 2025, exceeding Wall Street expectations with an earnings per share (EPS) of $1.72, surpassing the forecasted $1.55. The company also exceeded revenue forecasts, reporting $1.18 billion against an expected $1.16 billion. Despite these positive results, JMP analysts maintained a Market Outperform rating and a $65 price target on the stock. The analysts noted OneMain’s strategic readiness to navigate economic changes, highlighting its conservative credit underwriting practices and robust loss provisioning.
The earnings report revealed a 19% year-over-year increase in adjusted net income per share and a 10% growth in revenue compared to the previous year. OneMain’s management emphasized the company’s commitment to cautious credit underwriting and long-term growth initiatives. Additionally, the company is exploring an Industrial Loan Company (ILC) application, which could enhance its strategic capabilities. OneMain’s strategic focus on a multi-product platform and digital innovation contributed to its strong performance, with a 12% increase in managed receivables.
Looking ahead, OneMain Holdings projects managed receivables growth of 5-8% and total revenue growth of 6-8% for 2025. The company’s management expressed confidence in its ability to manage through uncertain economic environments, supported by its strong balance sheet and diversified funding sources. Despite economic uncertainties, OneMain maintained its competitive position with a conservative credit model, which analysts from JMP view as a positive factor in the company’s ability to handle macroeconomic shifts.
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