Equitable Holdings: Undervalued Stock with Strong Growth Potential and Strategic Focus on Capital-Light Segments

Analyst Bob Huang from Morgan Stanley maintained a Buy rating on Equitable Holdings (EQH – Research Report) and keeping the price target at $67.00.

Bob Huang has given his Buy rating due to a combination of factors that highlight Equitable Holdings’ potential for long-term growth. Despite the company’s strong year-to-date performance, with shares rising approximately 16% compared to the S&P 500’s 2% increase, Huang believes the stock remains undervalued. The stock is trading at about $55 per share, which is approximately 6.7 times the projected 2026 earnings per share, suggesting room for appreciation.
Huang points out that the company’s multi-channel business model, supported by a favorable rate environment and an aging population, positions it well for sustainable growth. The Investment Management and Wealth Management segments are expected to drive future growth, contributing to a 60-70% payout ratio and 12-15% earnings per share growth. Although Equitable trades at a premium compared to its annuity peers, its strategic focus on capital-light segments and the anticipated shift towards a balanced mix of Investment Management and Retirement businesses are expected to support long-term growth and warrant multiple expansion.

In another report released on June 3, Jefferies also assigned a Buy rating to the stock with a $70.00 price target.