Equitable Holdings Rises 4.7% Since Q3 Beat on Strong Asset Management

Equitable Holdings, Inc. EQH shares have gained 4.7% since it reported third-quarter 2024 results on Nov. 4, 2024. Its strong third-quarter earnings benefited on the back of robust new business activity and favorable market conditions, triggering higher AUM/A and growth in spread income and fee-based revenues.Improved performance in Group Retirement and Asset Management were major tailwinds along with rising investment income. However, the upside was partly offset by an elevated overall expense level.EQH reported a third-quarter 2024 adjusted earnings per share (EPS) of $1.53, which outpaced the Zacks Consensus Estimate by a penny. The bottom line jumped from $1.15 per share a year ago.Operating revenues of $3.78 billion improved 9.1% year over year in the third quarter but missed the consensus estimate by 2%.Equitable Holdings, Inc. Price, Consensus and EPS Surprise Equitable Holdings, Inc. price-consensus-eps-surprise-chart | Equitable Holdings, Inc. QuoteQ3 Performance DetailsPolicy charges and fee income amounted to $626 million, which rose from $599 million a year ago. Premiums of $313 million increased from the year-ago period’s $267 million. Net investment income of $1.31 billion climbed from $1.07 billion a year ago.Total benefits and other deductions increased to $3.09 billion from $2.15 billion in the year-ago quarter. The year-over-year rise was due to higher commissions, distribution-related payments, and interest credited to policyholders’ account balances, partially offset by lower policyholders’ benefits, compensation and benefits and other operating costs. A negative change in market risk benefits and purchased market risk benefits in the year-ago quarter lowered the year-ago total expenses.Pre-tax loss was $14 million against an income of $1.48 billion in the year-ago period.Total AUM was $933.8 billion in the third quarter, up from $843.4 million at 2023-end. Total Assets Under Management/Administration or AUM/A jumped to $1,034 billion from $860 billion a year ago.Q3 Segmental UpdateIndividual Retirement: Segment revenues were $944 million in the third quarter, up from $762 a year ago, beating the Zacks Consensus Estimate by 11.1%. The segment’s pre-tax income fell to $262 million from $277 million a year ago.Group Retirement: The unit recorded revenues of $314 million in the quarter under review, which grew from $267 million and beat the consensus estimate by 7%. Its pre-tax income rose to $164 million from $132 million a year ago.Asset Management: The segment witnessed revenues of $1.09 billion in the quarter under review, which grew from $1.03 billion and beat the consensus mark by 10.9%. The pre-tax income rose to $253 million from $220 million a year ago.Protection Solutions: The unit recorded revenues of $839 million in the quarter under review, which grew from $822 million but missed the consensus estimate by 1.4%. Its pre-tax income jumped to $56 million from $41 million a year ago.Wealth Management: Segment revenues were $450 million in the third quarter, up from $390 a year ago, but missing the consensus estimate by 0.4%. The segment’s pre-tax income rose to $66 million from $53 million a year ago.Legacy: The segment witnessed revenues of $117 million in the quarter under review, which fell from $129 million a year ago and missed the consensus mark by 41.2%. The pre-tax income fell to $32 million from $39 million a year ago.Financial Update (as of Sept. 30, 2024)Equitable Holdings exited the third quarter with total investments and cash and cash equivalents of $123.83 billion, which rose from the 2023-end level of $110.4 billion. Total assets of $298.99 billion increased from the $276.8 billion figure at 2023 end.Long-term debt amounted to $3.83 billion, up marginally from the 2023-end level of $3.82 billion.Total equity of $3.22 billion rose from the $2.65 billion level at 2023 end.Capital ReturnedEquitable Holdings returned $330 million ($76 million cash dividend and $254 million repurchases) in the quarter under review. The company has a payout ratio target of 60-70% of non-GAAP operating earnings.Future ViewIt expects 2024 cash generation to be at the upper limit of the guided range of $1.4-$1.5 billion. The company targets to reach $2 billion of annual cash generation by 2027. It also expects a non-GAAP operating EPS CAGR of 12-15% through 2027.Zacks Rank & Key PicksEQH currently has a Zacks Rank #3 (Hold).Investors interested in the broader Finance space may look at some better-ranked players like Root, Inc. ROOT, AXIS Capital Holdings Limited AXS and Brown & Brown, Inc. BRO. While Root currently sports a Zacks Rank #1 (Strong Buy), AXIS Capital and Brown & Brown carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus mark for ROOT’s current-year earnings indicates an 88.2% year-over-year improvement. It beat earnings estimates in each of the trailing four quarters, with an average surprise of 127.2%. Furthermore, the consensus estimate for Root’s 2024 revenues indicates 147.9% year-over-year growth.The consensus mark for AXIS Capital’s current-year earnings indicates 10.6% year-over-year growth. It beat earnings estimates in each of the trailing four quarters, with an average surprise of 90.3%. Furthermore, the consensus estimate for AXS’ 2024 revenues indicates a 7.4% year-over-year increase.The Zacks Consensus Estimate for Brown & Brown’s current-year earnings is pegged at $3.73 per share, which indicates 32.7% year-over-year growth. It has witnessed four upward estimate revisions against none in the opposite direction in the past month. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 6.9%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Axis Capital Holdings Limited (AXS): Free Stock Analysis Report Brown & Brown, Inc. (BRO): Free Stock Analysis Report Equitable Holdings, Inc. (EQH): Free Stock Analysis Report Root, Inc. 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