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Equitable Group Inc (TSE:EQB)
TSX:EQB
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Equitable Group
(TSX:EQB)
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Rating:65Neutral
Price Target:
C$125.00
â–²(7.79% Upside)
Action:N/ADate:12/18/25
Equitable Group's overall stock score reflects a balanced view of its strengths and risks. The company's strong cash flow and operational efficiency are positive, but challenges in revenue growth and high leverage are concerns. Technical indicators suggest bullish momentum, but caution is advised due to overbought signals. The valuation is reasonable, providing a fair entry point for investors.
Positive Factors
Free Cash Flow Strength
A 75.86% increase in free cash flow indicates materially improved cash generation that can fund loan originations, deposit growth, dividends and required regulatory capital internally. Sustained FCF strength lowers reliance on wholesale funding and increases strategic flexibility over the medium term.
Margin Resilience
Maintaining reasonable gross and net margins despite revenue pressure shows the business can control costs and preserve lending spreads. This margin resilience supports consistent profitability, provisioning capacity and reinvestment in distribution, helping stabilize earnings over coming quarters.
Stable Return on Equity
A stable ROE reflects effective capital allocation and profitable lending spreads, signaling that management can generate returns on shareholder capital. Sustained ROE supports dividend capacity and internal capital buildup, aiding growth or loss absorption without immediate external capital needs.
Negative Factors
High Leverage
Significant leverage increases sensitivity to interest-rate and funding shocks and reduces financial flexibility. For a mortgage-focused lender, elevated debt-to-equity limits the ability to absorb credit deterioration or fund growth without raising costly capital, raising medium-term risk.
Declining Revenue
Negative revenue growth of roughly -8.8% indicates pressure on origination volumes or net interest income. Persistent top-line contraction constrains margin recovery, limits reinvestment in distribution and makes it harder to rebuild earnings momentum and capital buffers over the next several quarters.
Earnings Contraction
A ~41.7% decline in EPS points to meaningful earnings stress from margin compression, provisions or lower volumes. Large EPS contraction reduces retained earnings accumulation, pressures dividend sustainability and weakens the capital cushion that supports lending growth or loss absorption moving forward.
Equitable Group (EQB) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$4.24B
Dividend Yield2.09%
Average Volume (3M)179.27K
Price to Earnings (P/E)19.3
Beta (1Y)0.56
Revenue Growth-7.50%
EPS Growth-34.45%
CountryCA
Employees1,896
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)2.26
Shares Outstanding36,592,780
10 Day Avg. Volume180,980
30 Day Avg. Volume179,270
Financial Highlights & Ratios
PEG Ratio-0.38
Price to Book (P/B)1.07
Price to Sales (P/S)1.10
P/FCF Ratio6.17
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$124.14Price Target Upside7.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)9.4
Revenue Forecast (FY)C$1.27B
Equitable Group Business Overview & Revenue Model
Company DescriptionEQB Inc., through its subsidiary, Equitable Bank, provides personal and commercial banking services to retail and commercial customers in Canada. The company accepts term deposits and guaranteed investment certificates, high interest savings accounts, tax-free savings accounts, and institutional deposit notes, as well as specialized financing solutions. Its loan products include residential mortgages; equipment loans; home equity, cash surrender value, and commercial equity lines of credit; business enterprise solutions comprising mixed use, multi-residential properties, retail spaces, office condominiums, and industrial buildings; and asset repositioning, inventory, term, and construction loans. The company also offers digital banking services, as well as a range of banking solutions, including international money transfers, US dollar accounts, and a suite of registered products. The company was formerly known as Equitable Group Inc. and changed its name to EQB Inc. in June 2022. EQB Inc. was founded in 1970 and is headquartered in Toronto, Canada.
How the Company Makes MoneyEquitable Group generates revenue through multiple streams, primarily from interest income on loans and mortgages, which constitutes a significant portion of its total revenue. The company earns interest by lending funds to borrowers at rates higher than the rates it pays on deposits. Additionally, EQB receives fees from various banking services, including account maintenance fees and transaction fees. The company also benefits from investment income generated from its portfolio of securities. Strategic partnerships with real estate developers and financial advisors enhance its distribution channels and contribute to increased loan origination volumes, further driving revenue growth.
Equitable Group Earnings Call Summary
Earnings Call Date:Aug 27, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there were notable achievements in loan portfolio growth and EQ Bank's customer acquisition, the financial performance fell short of expectations due to increased credit provisions, net income decline, and rising expenses. The strategic leadership changes indicate a focus on future growth and resilience.Q3-2025 Updates
Positive Updates
Loan Portfolio Growth
Loans under management increased 3% sequentially and 10% year-over-year to approximately $74 billion. Combined with administrative assets, it reached a new record of $137 billion, up 9% year-over-year.
Commercial Lending Strength
CMHC-insured multi-unit residential loans under management grew 8% sequentially and 30% year-over-year to $31.4 billion.
EQ Bank Customer Growth
EQ Bank added 26,000 new customers, a gain of 21% year-over-year, with deposits reaching $9.7 billion, growing at the fastest sequential rate in the last three years.
Record Decumulation Lending Portfolio
Decumulation lending portfolio reached a record of $2.7 billion, up 8% sequentially and 41% year-over-year.
Strategic Leadership Appointments
Chadwick Westlake appointed as President and CEO, and Anilisa Sainani as the new CFO, signaling a new era for EQB leadership.
Negative Updates
Below Expectation Revenue and Earnings
Revenue and earnings performance for the quarter were below expectations with a reported ROE of 12.4% year-to-date, and an anticipated ROE for fiscal 2025 around 11.5%.
Increased Credit Provisions
Total Stage 1 and 2 allowances for credit losses increased to 27 basis points, up from 25 basis points in Q2 2025, and up from 20 basis points in Q3 2024. Overall allowance reached $174.4 million, up 4 points sequentially and 7 points year-over-year.
Net Income Decline
Net income for the quarter was $80.3 million, down 15% from Q2 and 32% year-over-year. Diluted EPS was $2.07 and ROE was 10.1%.
Rising Expenses
Noninterest expenses grew to $166 million in the quarter, up 6% from Q2, driven by investments in the Challenger team, technology spend, and increased premises expenses.
Challenges in Personal Lending
Gross impaired loans in personal lending increased to $352 million, a 9.5% increase from Q2, largely driven by credit migration and a softening in the housing market.
Company Guidance
During EQB's third quarter earnings call for fiscal year 2025, the company provided several key financial metrics and strategic insights. Loans under management increased by 3% sequentially and 10% year-over-year to approximately $74 billion, contributing to total assets of $137 billion, up 9% from the previous year. The company's return on equity (ROE) was reported at 12.4% year-to-date, but due to ongoing headwinds, it is anticipated to be around 11.5% for the full fiscal year. EQ Bank added 26,000 new customers, a 21% year-over-year increase, with deposits reaching $9.7 billion. Despite these positives, the quarter faced challenges, including elevated provisions for credit losses, which reached $34 million, and a net interest margin that declined to 1.95%. EQB's net income for the quarter was $80.3 million, down 15% from the previous quarter. The company remains focused on strategic growth, with plans to host an Investor Day in 2026 to outline its long-term objectives.Equitable Group Financial Statement Overview
Summary
Equitable Group demonstrates a mixed financial performance with strengths in cash flow generation and operational efficiency. However, challenges in revenue growth and high leverage present potential risks. The company should focus on improving revenue growth and managing debt levels to ensure long-term financial stability.Income Statement
The income statement shows a decline in revenue growth with a negative growth rate of -1.46% in the latest year, indicating a potential slowdown in business momentum. However, the company maintains a reasonable gross profit margin and net profit margin, suggesting operational efficiency. The EBIT and EBITDA margins have decreased compared to previous years, reflecting potential challenges in maintaining profitability.65
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage which could pose risks in volatile markets. However, the company has managed to maintain a stable return on equity, showcasing its ability to generate profits from shareholders' investments. The equity ratio is moderate, suggesting a balanced approach to financing assets through equity.70
Positive
Cash Flow
The cash flow statement highlights a strong free cash flow growth of 75.86%, indicating improved cash generation capabilities. The operating cash flow to net income ratio is positive, reflecting efficient cash conversion from earnings. However, the free cash flow to net income ratio shows some variability, suggesting potential fluctuations in cash availability.75
Positive
| Breakdown | Oct 2025 | Oct 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.11B | 3.34B | 3.05B | 1.66B | 1.17B |
| Gross Profit | 1.23B | 1.15B | 3.05B | 744.93M | 650.58M |
| EBITDA | 439.45M | 614.37M | 46.99M | 1.30B | 423.08M |
| Net Income | 265.30M | 400.56M | 445.91M | 270.18M | 292.53M |
Balance Sheet | |||||
| Total Assets | 53.49B | 53.23B | 52.93B | 51.14B | 36.16B |
| Cash, Cash Equivalents and Short-Term Investments | 2.26B | 2.03B | -1.32B | 2.34B | 1.44B |
| Total Debt | 13.12B | 19.27B | 17.37B | 19.54B | 13.58B |
| Total Liabilities | 50.28B | 50.10B | 50.09B | 48.61B | 34.21B |
| Stockholders Equity | 3.20B | 3.13B | 2.85B | 2.53B | 1.95B |
Cash Flow | |||||
| Free Cash Flow | 555.10M | -345.61M | 561.49M | -46.69M | 654.68M |
| Operating Cash Flow | 639.99M | -278.24M | 596.45M | 29.89M | 693.26M |
| Investing Cash Flow | -66.58M | 402.77M | -1.77B | -766.77M | -458.25M |
| Financing Cash Flow | -179.75M | -82.36M | 1.26B | 458.74M | -19.50M |
Equitable Group Technical Analysis
Neutral
115.97
Price Trends
109.32
Positive
99.48
Positive
97.68
Positive
Market Momentum
2.24
Positive
56.66
Neutral
29.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EQB, the sentiment is Neutral. The current price of 115.97 is below the 20-day moving average (MA) of 116.19, above the 50-day MA of 109.32, and above the 200-day MA of 97.68, indicating a neutral trend. The MACD of 2.24 indicates Positive momentum. The RSI at 56.66 is Neutral, neither overbought nor oversold. The STOCH value of 29.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:EQB.
Equitable Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | C$559.43M | 11.29 | 9.72% | 7.95% | -13.69% | -1.60% | |
69 Neutral | C$446.74M | 11.79 | 8.90% | 8.38% | -6.64% | 4.43% | |
69 Neutral | C$974.82M | 12.70 | 10.50% | 7.33% | 7.74% | -31.96% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | C$741.14M | 25.69 | 6.08% | 0.49% | 3.31% | -39.12% | |
65 Neutral | C$4.24B | 19.29 | 8.72% | 2.09% | -7.50% | -34.45% | |
56 Neutral | C$555.27M | 16.13 | 5.52% | 10.00% | -9.00% | -35.22% |
* Financial Sector Average
TSE:EQB
Equitable Group
115.97
19.05
19.65%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.