Group 1 - Equitable Holdings (NYSE:EQH) is recognized as one of the best financial pure plays under $100, with a bullish rating initiated by Mizuho Securities analyst Yaron Kinar, who set a price target of $66, indicating over 37% upside potential from current levels [1] - Kinar's positive outlook is attributed to a strong preference for life insurance businesses, where Equitable Holdings has a significant presence through a comprehensive suite of products, including Variable Universal Life, Indexed Universal Life, Term Life insurance, and Annuities [2] - As of December 30, Equitable Holdings received coverage from 8 analysts, with 6 assigning Buy ratings and 2 giving Hold ratings, leading to a median 1-year price target of $63, which implies nearly 31% upside from the current market price [3] Group 2 - Equitable Holdings is a leading financial services firm in the United States, providing retirement plans, wealth management, insurance, and protection services, along with a diverse array of products [4]

Core Viewpoint - Equitable Holdings (EQH) has shown modest performance over the past year, with a gain of approximately 4% [1] Group 1: Company Performance - The company is actively repurchasing stock and has undergone significant business transformation through a large reinsurance transaction [1] - Mixed results have been observed throughout the year, indicating variability in performance metrics [1] Group 2: Analyst Insights - The analyst has over fifteen years of experience in making contrarian bets based on macro views and stock-specific turnaround stories [1]

Core Viewpoint - Equitable Holdings (EQH) has shown modest performance over the past year, with a gain of approximately 4% [1] Group 1: Company Performance - The company is actively repurchasing stock and has undergone a significant reinsurance transaction to transform its business [1] - Mixed results have been observed throughout the year, indicating variability in performance metrics [1] Group 2: Analyst Insights - The analyst has over fifteen years of experience in making contrarian bets based on macro views and stock-specific turnaround stories [1] - The focus is on achieving outsized returns with a favorable risk/reward profile [1]

Financial Performance - The company reported a pre-tax net income loss of $499 million due to the novation of certain legacy variable annuity policies, resulting in a total impact loss of $236 million[444]. - The company recorded a net income loss impact of $63 million due to economic assumption updates in Q3 2025, compared to a net income increase of $16 million in Q3 2024[478][480]. - The impact of assumption updates on income from continuing operations before income taxes was a decrease of $80 million in 2025, while it was an increase of $20 million in 2024[477][480]. - Non-GAAP Operating Earnings for 2025 showed a favorable impact of $1 million before tax adjustments, while in 2024, it was favorable by $4 million[485][487]. - Non-GAAP Operating Earnings decreased by $62 million to $455 million for the three months ended September 30, 2025, from $517 million in the same period of 2024[517]. - Non-GAAP Operating Earnings decreased by $261 million to $1.2 billion for the nine months ended September 30, 2025, from $1.5 billion in the same period of 2024[523]. - Net income attributable to Holdings decreased by $1.2 billion to a net loss of $1.3 billion for the three months ended September 30, 2025, compared to a net loss of $132 million for the same period in 2024[516]. - Net income attributable to Holdings decreased by $2.0 billion to a net loss of $1.6 billion during the nine months ended September 30, 2025, from net income of $388 million in the same period of 2024[519]. Investment and Asset Management - The company’s revenues are derived from fee income, premiums from life insurance and annuity products, and investment income from the General Account investment portfolio[464][467]. - The company’s investment income is affected by the yield on its General Account investment portfolio and prevailing interest rates[464]. - Investment gains for Q3 2025 were $1,170 million, significantly higher than $46 million in Q3 2024, and totaled $1,255 million for the nine months ended September 30, 2025, compared to $101 million in 2024[496]. - The company’s total Assets Under Management (AUM) includes investment assets managed by subsidiaries, reflecting the overall performance of the investment portfolio[505]. - Total AUM as of September 30, 2025, was $860.1 billion, up $31.0 billion or 3.7% compared to June 30, 2025, driven by market appreciation of $33.3 billion[542]. - The balance of the General Account asset value at the end of the period was $171.7 billion, up from $151.8 billion in the previous year[532]. - The total investment income for the three months ended September 30, 2025, was $1,399 million, with a yield of 4.51%[569]. - The total investment income for the nine months ended September 30, 2025, was $4,137 million, with a yield of 4.54%[571]. Market Conditions and Risks - The company faces potential market volatility due to various macroeconomic factors, which could pressure sales and reduce demand for its products[450]. - The company continues to monitor customer behavior, including mortality and morbidity rates, to ensure product attractiveness and profitability[451]. - The NAIC adopted an amendment to enhance capital requirements for CLO investments, effective January 1, 2024, impacting the company's investment strategy[453]. - The company is preparing to comply with the new actuarial guideline AG 55, which requires enhanced asset adequacy testing for certain reinsurance transactions, with reporting required by December 31, 2025[458]. - The company utilizes dynamic and static hedging strategies to mitigate risks associated with variable annuity products, which may lead to net income volatility[469][472]. - Hedging activities are in place to mitigate risks from equity market and interest rate movements, utilizing derivatives as part of the risk management program[630]. Reinsurance and Liability Management - The company ceded a 75% quota share of its in-force individual life insurance block to RGA as part of the RGA Reinsurance Transaction, effective April 1, 2025[441]. - The investment advisory agreement with RGA involves managing approximately 70% of assets supporting reserves associated with the ceded policies[442]. - The company recorded a reduction of the purchased MRB asset of $2.0 billion and a reduction of liability for MRBs of $1.6 billion due to the novation[444]. - The company reinsured net retained general account liabilities to Equitable Bermuda, securing obligations through asset retention[593]. - Fee-type revenue decreased by $211 million primarily due to a reinsurance transaction with RGA[560]. - Net investment income decreased by $61 million, also primarily due to the reinsurance transaction with RGA[560]. - Policyholders' benefits decreased by $142 million, mainly due to the reinsurance transaction with RGA, partially offset by higher net mortality in the Life business[560]. Shareholder and Capital Management - The AB Tender Offer commenced to purchase up to 46 million AB Holding Units at a price of $38.50 per unit, with an aggregate purchase price of $1.8 billion, and 19.7 million units were purchased for $758 million, representing approximately 17.9% of outstanding units[445]. - The company had authorized capacity of approximately $1.3 billion remaining in its share repurchase program as of September 30, 2025, with an additional $1.5 billion approved for repurchases[596]. - The total business capital activity for the nine months ended September 30, 2025, was $1.127 billion, with significant cash outflows for share repurchases and dividends[599]. - Future dividends are subject to the discretion of the Board and depend on financial condition, results of operations, and regulatory restrictions[621]. - The principal sources of liquidity for the insurance subsidiaries include premiums, investment income, and cash from operations, while uses include claims, dividends, and administrative expenses[625]. - The company manages its capital position to maintain financial strength and credit ratings, supported by cash flows from subsidiaries and effective risk management[619]. Segment Performance - Operating earnings for the Retirement segment decreased by $15 million to $401 million for the three months ended September 30, 2025, compared to $416 million for the same period in 2024[533]. - Total segment revenues for the Retirement segment increased to $4.53 billion for the nine months ended September 30, 2025, compared to $4.06 billion for the same period in 2024[530]. - Operating earnings for the Asset Management segment increased by $43 million to $154 million during the three months ended September 30, 2025, compared to $111 million in the same period of 2024[541]. - Wealth Management segment operating earnings increased by $10 million to $59 million during the three months ended September 30, 2025, compared to $49 million in the same period of 2024[552]. - Total Wealth Management Assets at the end of September 2025 were $118.2 billion, up from $101.5 billion in September 2024[551]. - Advisory net inflows of $2.2 billion in the three months ended September 30, 2025, were $146 million higher than in the same period of 2024, driven by increased sales[553].

Core Insights - Diamond Hill Capital's "Large Cap Fund" underperformed the Russell 1000 Value Index in Q3 2025 despite the overall market rally, with the Russell 3000 Index gaining 8% and calendar-year returns exceeding 14% [1][2] Company Overview - Equitable Holdings, Inc. (NYSE:EQH) is highlighted as a leading diversified financial services company, with a one-month return of -4.28% and a 52-week loss of 9.67%, closing at $45.22 per share on November 5, 2025, and a market capitalization of $14.584 billion [2][3] Investment Strategy - The fund initiated four new positions in Q3 2025, including Equitable Holdings, indicating a belief that its stock price does not reflect its long-term growth potential [3] Hedge Fund Interest - Equitable Holdings, Inc. was held by 42 hedge fund portfolios at the end of Q2 2025, a decrease from 49 in the previous quarter, suggesting a decline in popularity among hedge funds [4] Comparative Analysis - While acknowledging the potential of Equitable Holdings, the company believes that certain AI stocks present greater upside potential and lower downside risk, indicating a shift in investment focus [4]

Financial Data and Key Metrics Changes - Non-GAAP operating earnings were $455 million, or $1.48 per share, down 6% year over year on a per-share basis [4][14] - Adjusted for notable items, non-GAAP operating EPS was $1.67, up 2% compared to the prior year [5][14] - Total assets under management reached a record $1.1 trillion, up 4% sequentially and 7% year over year [5][14][16] - The consolidated GAAP net loss was $1.3 billion, primarily due to a one-time impact from asset transfers related to the life reinsurance transaction [14] Business Line Data and Key Metrics Changes - Retirement businesses generated $1.1 billion of net flows during the quarter, driven by growth in umbrella sales [5] - Wealth management had $2.2 billion of advisory net inflows, reflecting a 12% annualized growth rate [5] - Asset management reported total net outflows of $2.3 billion, but excluding low-fee assets transferred to RGA, net inflows were $1.7 billion [5][18] Market Data and Key Metrics Changes - The retirement segment saw a 7% increase in RILA sales, achieving record sales in nine of the last ten quarters [31][44] - Private markets assets increased 17% year over year to $80 billion, on track to meet the $90-$100 billion target by 2027 [5][13] Company Strategy and Development Direction - The company focuses on three core growth businesses: retirement, asset management, and wealth management, which provide synergies and flywheel benefits [8][9] - Key strategic pillars include defending and growing existing businesses, scaling high-growth wealth management, and investing in high-potential opportunities [8][9] - The acquisition of Stifel Independent Advisors aims to enhance the wealth management business, expected to close in the first half of 2026 [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 financial targets, supported by strong organic growth momentum and increased assets under management [4][23] - The company anticipates continued double-digit growth in wealth management earnings, driven by asset growth and improved advisor productivity [11][18] - Management expects to see less volatility in life results going forward due to the benefits of the life reinsurance transaction [14][35] Other Important Information - The company returned $757 million to shareholders, including $676 million in share repurchases, and reduced outstanding debt by $500 million [7][21] - The adjusted debt to capital ratio was reported at 24.5% [16] - The consolidated tax rate for the quarter was 17%, below the normal expectation of 20% [20][21] Q&A Session Summary Question: Perspectives on the private credit environment and underwriting process - Management views private credit as a good asset class and emphasizes the importance of underwriting capabilities [25][28] Question: Differentiation in the RILA market amidst increased competition - The company maintains a sustainable edge through attractive yields, privileged distribution, and a track record of innovation [31][32] Question: Comments on unfavorable mortality experience and expectations for normalization - Management noted that retained experience was only about $10 million worse than expected, indicating modest impact from mortality [35] Question: Strategy for capital deployment from the RGA deal - The company plans to balance capital returns and acquisitions, emphasizing the ability to do both due to excess capital [58][59] Question: Growth opportunities in the spread lending business - The company has significant capacity to grow the FABN business, having issued about $4.5 billion year to date [61]

Financial Performance - Non-GAAP operating earnings per share were $1.48, or $1.67 after adjusting for notable items[8] - Record AUM/A reached $1.1 trillion, a 7% increase year-over-year and 9% year-to-date[8] - Non-GAAP operating earnings adjusted for notable items were $510 million, a 2% increase year-over-year on a per share basis[22, 23] - Net loss of $1.3 billion was driven by the closing of the RGA reinsurance transaction[23] Business Segment Highlights - Retirement net inflows were $1.1 billion, representing a 3% annualized organic growth rate[8] - Wealth Management advisory net inflows totaled $2.2 billion, a 12% annualized organic growth rate[8] - Asset Management net inflows were $1.7 billion, excluding the RGA impact; Private Markets AUM increased 17% year-over-year[8] - AB's adjusted operating margin was 34.2%, up 290bps year-over-year[60, 62] Capital Management - $757 million was returned to shareholders in Q3, including $676 million in share repurchases[8] - Debt was reduced by $500 million in the third quarter[8] - The company projects full year 2025 cash generation of $2.6-2.7 billion, including $1 billion of RGA proceeds[31] Strategic Investments and Acquisitions - The company announced the acquisition of Stifel Independent Advisors, with more than 110 advisors and approximately $9 billion of AUM[8, 15] - $100 million was allocated to support AB's investment in FCA Re, which includes a $1.5 billion private credit IMA[8] - Approximately $17 billion of a $20 billion commitment to the Private Markets Platform has been deployed[16]

Core Insights - Equitable Holdings, Inc. reported a revenue of $3.74 billion for the quarter ended September 2025, reflecting a 1% decrease year-over-year and a surprise of -6.01% compared to the Zacks Consensus Estimate of $3.98 billion [1] - The earnings per share (EPS) for the quarter was $1.48, down from $1.53 in the same quarter last year, with an EPS surprise of -6.92% against the consensus estimate of $1.59 [1] Financial Performance Metrics - Retirement net flows were reported at $1.22 billion, below the two-analyst average estimate of $1.52 billion [4] - Wealth Management advisory net new assets reached $2.21 billion, exceeding the average estimate of $1.75 billion [4] - Asset Management's assets under management (AUM) at the end of the period were $860.10 billion, slightly below the average estimate of $866.77 billion [4] - Net long-term inflows in Asset Management were reported at -$2.30 billion, better than the average estimate of -$2.44 billion [4] - Revenue from Retirement policy charges, fee income, and premiums was $296 million, compared to the average estimate of $311.81 million [4] - Revenue from investment management, service fees, and other income was $1.68 billion, below the average estimate of $1.79 billion [4] - Net derivative gains (losses) reported were -$17 million, worse than the average estimate of -$3.07 million [4] - Net investment income was $1.35 billion, slightly above the average estimate of $1.31 billion [4] - Policy charges, fee income, and premiums revenue was $729 million, compared to the average estimate of $782.48 million [4] - Corporate and Other revenue was $741 million, below the average estimate of $1 billion [4] - Wealth Management revenue was $499 million, in line with the average estimate of $498.14 million [4] - Retirement net derivative gains (losses) were reported at -$2 million, better than the average estimate of -$5.4 million [4] Stock Performance - Equitable Holdings' shares have returned -4.2% over the past month, contrasting with the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Equitable Holdings, Inc. (EQH) reported quarterly earnings of $1.48 per share, missing the Zacks Consensus Estimate of $1.59 per share, and showing a decrease from $1.53 per share a year ago, resulting in an earnings surprise of -6.92% [1] - The company posted revenues of $3.74 billion for the quarter ended September 2025, which was 6.01% below the Zacks Consensus Estimate and a decline from $3.78 billion year-over-year [2] - Equitable Holdings has only surpassed consensus EPS estimates once in the last four quarters and has not beaten consensus revenue estimates during the same period [2] Company Performance - Equitable Holdings shares have increased by approximately 3.4% since the beginning of the year, while the S&P 500 has gained 16.5% [3] - The current consensus EPS estimate for the upcoming quarter is $1.77 on revenues of $3.79 billion, and for the current fiscal year, it is $5.78 on revenues of $14.88 billion [7] Industry Context - The Zacks Industry Rank for Insurance - Multi line, to which Equitable Holdings belongs, is currently in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Equitable Holdings' stock performance [5]

Financial Performance - Net income attributable to Holdings decreased significantly to $(1,309) million for the nine months ended September 30, 2025, compared to $388 million for the same period in 2024, representing a decline of 511.1%[6] - Non-GAAP Operating Earnings for the three months ended September 30, 2025, were $455 million, down 12.0% from $517 million in the same period of 2024[6] - Total revenues for the three months ended September 30, 2025, decreased by 52.8% to $1,450 million compared to $3,073 million for the same period in 2024[9] - Net income attributable to Holdings for the three months ended September 30, 2025, was a loss of $1,309 million, a decrease of 891.7% from $892 million in the same period in 2024[9] - For the nine months ended September 30, 2025, consolidated operating earnings were $1,228 million, compared to $1,489 million for the same period in 2024, reflecting a decrease of 17.5%[17] Equity and Capital - Total equity attributable to Holdings' common shareholders fell to $148 million as of September 30, 2025, a decrease of 95.4% from $3,201 million a year earlier[6] - The company reported a return on equity (ex. AOCI) of (10.4)% for the trailing twelve months, compared to 14.0% in the previous year[6] - Book value per common share (ex. AOCI) decreased by 30.2% to $18.23 as of September 30, 2025, from $26.12 a year prior[6] - Total capital returned to common shareholders was $1,410 million for the nine months ended September 30, 2025, compared to $757 million for the same period in 2024[6] - The company’s debt to capital ratio (ex. AOCI) increased to 37.7% as of September 30, 2025, from 28.1% a year earlier[6] Assets and Liabilities - Total assets as of September 30, 2025, increased to $314,515 million from $298,841 million as of September 30, 2024, reflecting a growth of 5.2%[13] - Total liabilities as of September 30, 2025, were $312,567 million, up from $292,662 million as of September 30, 2024, representing a 6.8% increase[13] - Total long-term debt as of September 30, 2025, is $4,330 million, showing an increase from $3,831 million on September 30, 2024[14] Investment Income - Net investment income for the nine months ended September 30, 2025, increased by 7.1% to $3,946 million compared to $3,685 million for the same period in 2024[9] - The company reported net investment income of $1,350 million for the three months ended September 30, 2025, compared to $1,256 million for the same period in 2024, representing an increase of 7.5%[16] - Net investment income for the nine months ended September 30, 2025, was $3,972 million, compared to $3,622 million in 2024, reflecting an increase of 9.7%[17] Premiums and Policyholder Benefits - Policyholders' benefits for the nine months ended September 30, 2025, were $1,998 million, a slight decrease of 0.4% from $2,007 million for the same period in 2024[9] - The company experienced a 17.3% decline in premiums for the three months ended September 30, 2025, totaling $258 million compared to $312 million for the same period in 2024[9] - Policyholders' benefits for the three months ended September 30, 2025, decreased by 12.0% to $73 million from $83 million in the same period of 2024[25] Market Performance - The S&P 500 index value increased from 5,762 on September 30, 2024, to 6,688 on September 30, 2025, reflecting a growth of 16.1%[18] - The company's third-party AUM increased to $724.4 billion as of September 30, 2025, compared to $672.6 billion a year earlier, marking a growth of 7.7%[18] Shareholder Actions - Common stock dividends paid were $81 million for the three months ended September 30, 2025, compared to $76 million in the same period of 2024[6] - The company repurchased 10.9 million shares during the three months ended September 30, 2025[14] Non-GAAP Measures - The company emphasizes the use of Non-GAAP financial measures to provide a clearer picture of operating performance and underlying profitability trends[52] - The company reported a Non-GAAP Operating ROE for the previous twelve months, which is calculated by dividing Non-GAAP Operating Earnings by consolidated average equity attributable to Holdings' common shareholders[59] Derivative and Other Financial Metrics - The company recorded a net derivative loss of $1,117 million for the three months ended September 30, 2025, a 56.4% decrease from a loss of $714 million in the same period in 2024[9] - The net derivative losses for the three months ended September 30, 2025, were $(4) million, a 75% improvement from $(16) million in the previous quarter[29]