Solid Earnings Power, Conservative Credit Assumptions, and Attractive Valuation Support Buy Rating on OneMain Holdings

TD Cowen analyst Moshe Orenbuch maintained a Buy rating on OneMain Holdings yesterday and set a price target of $78.00.

Moshe Orenbuch has given his Buy rating due to a combination of factors that, in his view, support attractive earnings power and shareholder returns despite some near‑term headwinds. He notes that fourth‑quarter earnings modestly missed his forecast but still came in ahead of the broader consensus, with slightly softer yields and higher expenses offset by in‑line credit provisioning. He also highlights that 2026 guidance for loan growth and operating expenses essentially matches his expectations, and that the company’s outlook implies the potential to deliver roughly $8 per share in earnings, with his revised forecasts calling for further earnings expansion into 2027. Importantly, he views the company’s loss guidance as cautious, reflecting legacy portfolio issues, labor market uncertainty, and growth in higher‑loss card balances, and therefore believes there is room for actual credit performance to land better than the midpoint of management’s range.
At the same time, Orenbuch underscores management’s constructive tone and expectation for faster loan growth in 2026, which he sees as a key driver of future earnings. He points to the firm’s demonstrated commitment to shareholder returns, including $70 million of share repurchases in the quarter that exceeded his expectations, as well as the continuation of a robust dividend policy alongside ongoing capital deployment into buybacks. On valuation, he bases his $78 price target on applying an 8x multiple to his 2027 earnings estimate, implying meaningful upside from the current share price. Taken together, the combination of solid earnings potential, conservative credit assumptions, disciplined capital return, and a favorable valuation framework underpins his decision to maintain a Buy rating on OneMain Holdings.

In another report released on January 27, Northland Securities also maintained a Buy rating on the stock with a $68.00 price target.

Based on the recent corporate insider activity of 38 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of OMF in relation to earlier this year.