Equitable Holdings Signals 2026 Rebound After Mixed 2025

Equitable Holdings, Inc. ((EQH)) has held its Q4 earnings call. Read on for the main highlights of the call.

Equitable Holdings’ latest earnings call struck a cautiously upbeat tone as management balanced record asset levels and strong cash generation against softer‑than‑hoped earnings growth. Executives highlighted healthy business momentum, especially in wealth and retirement, while acknowledging mortality impacts, asset management outflows, and Corporate & Other losses that have tempered recent EPS progress.

Record Asset Base Fuels Fee-Earning Potential

Equitable closed 2025 with record assets under management and administration of $1.1 trillion, up 10% year over year. Management emphasized that this larger asset base should support fee and spread-based earnings, providing a structural tailwind even as certain segments face nearer-term volatility.

Robust Cash Generation and Shareholder Payouts

The company delivered $1.6 billion of organic cash generation for 2025, landing within its $1.6 billion to $1.7 billion guidance range. Equitable returned $1.8 billion to shareholders, including $500 million in incremental buybacks, trimming its share count by 9% over the past year.

Slower EPS Growth, But Stronger 2026 Outlook

Non‑GAAP operating earnings for 2025 were $5.64 per share, or $6.21 after notable items, just 1% higher than in 2024. Management nonetheless signaled confidence that EPS growth in 2026, excluding notable items, will accelerate and surpass the company’s 12% to 15% long‑term target range.

Retirement Segment Delivers Healthy Flows

The retirement business generated $5.9 billion of net flows in 2025, translating to a 4% organic growth rate. Net interest margin improved sequentially, and management guided to mid‑ to high‑single‑digit pretax earnings growth for this segment in 2026.

Wealth Management Emerges as Growth Engine

Wealth Management posted $8.4 billion of net inflows, a robust 13% organic growth rate that underpinned a 40% year‑over‑year jump in fourth-quarter earnings. The unit hit its $200 million annual earnings goal two years ahead of schedule and expanded its advisor force, increasing the number of wealth planners by 12%.

AllianceBernstein Boosted by Private Markets and Margins

At AllianceBernstein, private markets assets grew 18% to $82 billion, with management targeting $90 billion to $100 billion by year‑end 2027. AB reported a 2025 adjusted operating margin of 33.7%, near the top of its range, supported by fourth‑quarter performance fees of $82 million.

Balance Sheet Derisking Supports Capital Strength

A major life reinsurance deal with RGA unlocked roughly $2.0 billion of capital while cutting net mortality exposure by about 75%. Equitable now reports an adjusted debt‑to‑capital ratio near 25% and expects combined regulatory capital to stand at around 475% at the end of 2025.

Expense Discipline and Yield Upside

The company is progressing toward its $150 million expense‑save target by 2027, with roughly $120 million already embedded in the run rate. It also met a $110 million goal for incremental investment income by reallocating more assets into private markets strategies.

Mortality Headwinds Weigh on 2025 Earnings

Elevated mortality claims remained a clear drag on 2025 results, including about $25 million of adverse experience in the fourth quarter alone. Management has now raised GAAP mortality assumptions and baked additional prudence into the 2026 outlook to reduce future volatility.

EPS Trajectory Trails Long-Term Plan

Through the first three years of its 2027 strategic plan, Equitable’s EPS growth has averaged 8%, below the 12% to 15% compound annual pace it had targeted. Executives conceded EPS is the one metric off‑plan and are leaning on 2026 acceleration and multiple cost and capital levers to narrow the gap.

AllianceBernstein Faces Net Outflow Challenge

Despite strength in private markets, AB saw total net outflows of $11.3 billion in 2025, including $4.0 billion of low‑fee assets tied to the RGA transaction. Those outflows have constrained fee revenue growth and remain a key investor focus as the firm works to rebuild overall net inflows.

Corporate & Other Volatility Adds Noise

Corporate & Other posted a larger‑than‑expected fourth‑quarter loss of $123 million, driven by a write‑off, mortality impacts, and seasonal factors. For 2026, management expects this bucket to remain a drag, forecasting a full‑year loss between $350 million and $400 million.

Spread Compression and Margin Pressures

In Retirement, modest net interest margin compression has emerged as a headwind, tied in part to runoff in a highly profitable older RILA block and timing effects in investment income. Management expects a further 2 to 4 basis points of pressure in the first half of 2026 before spreads stabilize in the back half.

Higher Distribution Costs from Mix and True-Ups

Commission and distribution expenses rose sequentially, with management calling out roughly a $25 million increase. The jump mainly reflected business mix and a one‑time allocation true‑up between the Retirement and Wealth Management segments.

Valuation Gap and Ongoing Investor Skepticism

Executives acknowledged that Equitable’s stock trades at a discount to the implied value of its AB stake, underscoring a persistent valuation gap. They also noted continued investor questions around private credit exposure and recent changes in disclosure, though the company describes its private credit risk as immaterial.

Guidance Points to Stronger 2026 Cash and EPS

For 2026, management projects total cash generation of about $1.8 billion, more than 10% above 2025’s $1.6 billion organic figure and keeping the firm on track for $2.0 billion by 2027. They expect EPS growth, excluding notable items, to surpass the 12% to 15% target, supported by mid‑ to high‑single‑digit pretax gains in Retirement, at least $80 million to $100 million in asset management performance fees, double‑digit Wealth earnings growth off a roughly $60 million quarterly base, and year‑end holding company cash near $1.1 billion.

Equitable’s earnings call painted a picture of a franchise with strong underlying businesses but a need to execute on its earnings plan. Record assets, solid cash generation, and disciplined capital returns underpin a constructive outlook, yet mortality, outflows at AB, and Corporate & Other losses remain important risks for investors to monitor as 2026 unfolds.