Goldman Sachs, Keefe Bruyette & Woods, RBC Capital Markets and Barclays analysts have initiated coverage of AXA Equitable Holdings Inc. after the closing of its IPO.
Goldman Sachs analyst Alex Scott initiated AXA Equitable with a "buy" rating and a price target of $34. He expects the company's solid cash flow yield and near-term return on equity improvement to drive cash flow higher over the next year. He also sees potential for a variable annuity risk transfer transaction for the company given its unique set of variable annuity liabilities that may be attractive to financial reinsurance companies.
KBW analyst Ryan Krueger gave AXA Equitable an "outperform" rating and $27 price target. He wrote that the company is well-capitalized and has solid capital management guidance. He also views the company's valuation as attractive among the highest free cash flow yields in the life sector.
Krueger's EPS estimates for the company are $3.50 for 2018 and $3.90 for 2019.
RBC Capital analyst Mark Dwelle started coverage of AXA Equitable with an "outperform" rating and $26 price target, writing that the company is a mature, well-established retirement products company with leading market positions.
Dwelle said the company's balance sheet is clean, with no legacy concerns and excess capital. He said it is positioned to deliver earnings growth and capital return, which will drive an increasing return on equity.
His full-year EPS estimates on the company are $3.60 for 2018, $3.85 for 2019 and $4.15 for 2020.
Barclays analyst Jay Gelb initiated AXA Equitable with an "equal weight" rating and $24 price target. He wrote that the company has low valuation and a strong management team, but he cannot pinpoint what would cause valuation to expand other than improved macro conditions.
He believes that AXA Equitable could face challenges should Axa sell down its remaining 72% stake in the company. Additionally, he said AXA Equitable's earnings are mostly tied to variable annuities, which many investors view as unfavorable. The challenges that the analyst forecasts for the company also include a significant negative gap between operating and net income.
Gelb's EPS estimates for the company are $3.65 for 2018 and $4.00 for 2019.
