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On Wednesday, UBS analyst Michael Ward upgraded Equitable Holdings Inc (NYSE:EQH) to a Buy rating, with a new price target of $49.00, highlighting potential growth and re-rating opportunities for the company. The upgrade reflects a positive outlook on the company’s earnings and strategic moves. According to InvestingPro data, analysts maintain a bullish consensus on EQH, with price targets ranging from $49 to $72. The stock has demonstrated strong momentum, delivering a 43% return over the past year and currently trades near its 52-week high of $56.
Ward’s analysis suggests a 10% potential upside to the consensus 2026 earnings per share (EPS) estimates for Equitable Holdings. This optimism is based on several key factors, including the company’s strong performance in the registered index linked annuity (RILA) market, where Equitable Holdings holds the leading market share. Despite consensus expectations for sales to plateau, Ward anticipates continued annual sales growth of 10-15% in this sector, contributing significantly to the overall upside. The company’s financial health is rated as GOOD by InvestingPro, with impressive revenue growth of 21.3% and a P/E ratio of 14.6x.
Another contributing factor to the positive outlook is the post-life-deal accretion expected from Equitable Holdings’ increased stake in AllianceBernstein (NYSE:AB), a majority-owned asset manager. UBS’s estimates are based on the assumption that the current tender offer will raise Equitable Holdings’ ownership to 70% from 62%, considering the offer’s uptake to date.
Additionally, UBS anticipates that Equitable Holdings’ Wealth segment will surpass expectations, projecting mid-teens annual earnings growth. This segment’s performance is seen as a driver of value for the company, as it is less capital-intensive and offers higher value.
In summary, UBS believes that Equitable Holdings’ focus on higher-value, less capital-intensive businesses will continue to drive a re-rating of the company’s stock. With these factors in play, Ward sees a 48% upside potential for Equitable Holdings’ shares from their current level.
In other recent news, Equitable Holdings has issued $500 million in junior subordinated debt securities, carrying an interest rate of 6.7% and maturing in 2055. This issuance is part of the company’s broader capital management strategy, with funds expected to be used for repurchasing Series B Depositary preferred shares and general corporate purposes. AM Best has assigned a "bbb-" rating to these notes, indicating good credit quality with a stable outlook. Meanwhile, S&P Global Ratings revised its outlook for Equitable Holdings to negative from stable due to increased financial leverage, although the company’s ’A+’ financial strength ratings for its operating companies remain unchanged.
Evercore ISI has maintained its Outperform rating for Equitable Holdings, noting the potential long-term benefits of the company’s recent actions concerning its AllianceBernstein stake. Additionally, BMO Capital Markets raised its price target for Equitable Holdings to $72, citing improvements in free cash flow from a recent reinsurance deal with Reinsurance Group (NYSE:RGA) of America. This transaction is expected to enhance the company’s earnings potential, with BMO adjusting its 2026 earnings per share estimate to $8.78. Equitable Holdings’ strategic focus on capital-light asset management operations, particularly through AllianceBernstein, is anticipated to strengthen its financial performance.
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