Is Equitable Holdings (EQH) Undervalued After Its Third Quarter Earnings Rebound?

Equitable Holdings (EQH) is back in focus after third quarter results showed revenue of US$3.88b and net income of US$1.12b, compared with a net loss in the same period last year.

The recent earnings release comes in a year when Equitable Holdings’ share price has risen 9.78% year to date, while the 1-year total shareholder return of 19.45% and roughly 3x gain over 3 years indicate that momentum has been building rather than fading.

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That kind of rebound in Equitable Holdings’ earnings can signal a stronger underlying franchise, or it can simply catch a hot wave of sentiment. The valuation section tests which story the current share price reflects.

Most Popular Narrative: 18% Undervalued

Equitable Holdings is trading at $52.66 against a widely followed fair value estimate of $63.91, so the current price sits below what that narrative suggests and places extra weight on how the Corebridge tie up and retirement demand story play out.

The planned Corebridge merger is expected to create a top-scale U.S. insurer with more than 10 million clients, about US$30b of GAAP book value and roughly US$5b of operating earnings capacity. This could improve operating leverage and support higher EPS if the combined business delivers on its earnings and cash flow targets.

See why 8 investors see Equitable Holdings as 18% undervalued.

Result: Fair Value of $63.91 (UNDERVALUED)

Still, the Equitable Holdings story can change quickly if Corebridge integration savings are harder to realize or if alternative asset returns remain below expectations.

Find out about the key risks to this Equitable Holdings narrative.

Next Steps

Mixed views about what the recent Equitable Holdings numbers may indicate for the coming years. Act promptly, review the underlying data, then weigh the 5 key rewards and 1 important warning sign.

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