Zacks Research Downgrades Equitable to Strong Sell Rating

Equitable Holdings, Inc. (NYSE: EQH) has received a significant downgrade from Zacks Research, which lowered its rating from “hold” to “strong sell.” This change, announced in a report on January 20, 2024, reflects a growing concern among analysts regarding the company’s financial performance and stock outlook.

In recent weeks, several financial institutions have reassessed their positions on Equitable. Raymond James Financial set a target price of $60.00 per share on January 5, while BMO Capital Markets reaffirmed an “outperform” rating on December 17. Conversely, UBS Group reduced its target price from $77.00 to $67.00 on January 8, maintaining a “buy” rating. Other analysts have also weighed in, with Wall Street Zen downgrading the stock to “sell” on November 16, 2023, and Barclays establishing a target price of $58.00 on January 8.

Currently, the consensus rating for Equitable is “Moderate Buy,” with one analyst giving a Strong Buy, ten rating it as Buy, one as Hold, and one as Sell. According to MarketBeat.com, the average target price for Equitable shares stands at $62.54.

Recent Financial Performance

Equitable last reported its quarterly earnings on November 4, 2023, where it posted earnings per share (EPS) of $1.48. This figure fell short of the consensus estimate of $1.59 by $0.11. The company generated $1.45 billion in revenue for the quarter, significantly lower than the anticipated $3.65 billion. This marks a substantial year-over-year decline of 52.8% in revenue.

Despite the challenges, Equitable recorded a notable return on equity of 107.71%, though it also reported a negative net margin of 5.80%. Analysts project that Equitable will achieve an EPS of $7.33 for the current year.

Dividend and Insider Transactions

On December 1, 2023, Equitable declared a quarterly dividend of $0.27 per share, which was paid to shareholders of record on November 24. This annualized dividend equates to $1.08, yielding approximately 2.4%. The company’s payout ratio currently stands at -39.13%.

In related news, CEO Mark Pearson sold 39,700 shares on January 20 at an average price of $46.20, amounting to a total transaction value of $1,834,140.00. Following this sale, Pearson retains 652,945 shares in the company, valued at about $30,166,059. This sale reflects a 5.73% reduction in his holdings.

Additionally, insider Nick Lane sold 30,000 shares on January 15 at an average price of $47.65, totaling $1,429,500.00. Lane now owns 99,958 shares, worth approximately $4,762,998.70. Recent insider activities indicate that a total of 203,770 shares have been sold, valued at around $9,462,206, with insiders owning 1.10% of the company’s stock.

Institutional Investment Trends

Institutional investors have also been active regarding Equitable shares. During the third quarter, Johnson Financial Group Inc. acquired a new stake valued at approximately $26,000. True Wealth Design LLC increased its holdings by 592.6% in the second quarter, now owning 561 shares valued at $31,000. Other institutions, such as Root Financial Partners LLC and Hilltop National Bank, also established new positions, with investments ranging from $36,000 to $38,000.

Overall, institutional and hedge fund investors collectively hold 92.70% of Equitable’s shares, indicating strong interest despite recent downgrades.

Equitable Holdings, Inc. is a prominent provider of life insurance, annuities, and retirement plan services in the United States. Its insurance subsidiary, AXA Equitable Life Insurance Company, offers a wide range of insurance products aimed at helping individuals manage risk and build wealth. The company also provides various annuity solutions and asset management services for retail and institutional clients.