Earnings per share (EPS) accretion

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Capital One Financial Corp.:第一资本金融公司(COF):基于最新公允价值标记的第一资本/发现金融服务公司合并最新增值分析-20250530
Goldman Sachs· 2025-05-30 02:45
Investment Rating - The report maintains a "Buy" rating on Capital One Financial Corp. (COF) with a 12-month price target of $242, indicating an upside potential of 30.8% from the current price of $185.08 [14][15]. Core Insights - The report projects a consolidated EPS of approximately $25.50 by 2027, reflecting an EPS accretion of around 34%, an increase from the previous estimate of 29% [3][5]. - The analysis includes a pro-forma CET1 ratio of 14.13% at closing, which adjusts to 15.00% when factoring in updated deal assumptions [7][8]. - The report anticipates approximately $24 billion in share buybacks through the end of 2027, with $16 billion expected by the end of 2026 [11]. - Cost reduction estimates for the integration of Discover Financial Services (DFS) into COF are conservative, with an expected reduction of 26% in operating expenses, compared to historical reductions of 35-40% in similar deals [3][11]. Summary by Sections Earnings Projections - GAAP net income is projected to be $7.94 billion in 2025, $10.01 billion in 2026, and $12.43 billion in 2027, with corresponding GAAP EPS of $13.15, $17.50, and $22.85 respectively [6][12]. Capital and Buybacks - The report models a total of $24 billion in buybacks through 2027, with a focus on maintaining a CET1 ratio of around 11% post-integration [11][12]. - The estimated TBV dilution post-deal close is approximately 21%, driven by a higher non-PCD allocation of DFS loans [11][12]. Fair Value and Loan Analysis - The fair value of the loans is estimated at approximately $116.6 billion, with no PCD "gross up" in the updated loan marks [9]. - The report indicates that a Day 2 allowance will need to be established for the non-PCD portion of the loans, resulting in a pro-forma CET1 of 13.77% post-closing [10].
澳大利亚保险集团(IAG):澳大利亚保险集团向西进发
Ubs Securities· 2025-05-16 05:45
Investment Rating - The report downgrades the investment rating for Insurance Australia Group (IAG) from Buy to Neutral, reflecting moderate value upside from the recent acquisition of RAC Insurance [2][6]. Core Views - IAG's acquisition of RAC Insurance is strategically and financially attractive, adding approximately 8% to IAG's Gross Written Premium (GWP) and increasing its market share in Western Australia (WA) from 8% to about 55% in Home and Motor insurance, pending ACCC approval [2][4][13]. - The total upfront consideration for the acquisition is A$1,350 million, which is internally funded and implies an annualized price-to-earnings (PE) ratio of 8.7x for 1H25, increasing to 10.8x post distribution costs [2][15]. - The deal is expected to be 6-10% accretive to earnings per share (EPS) post-synergies, with targeted synergies of A$100 million anticipated [3][19]. Summary by Sections Financial Metrics - IAG's FY25E EPS is revised up by 1.6%, FY26E remains flat, and FY27E is increased by 5.2%, reflecting better-than-expected catastrophe (CAT) outcomes and the incorporation of RAC Insurance from FY27E [5][28]. - The report estimates IAG's FY27E PE at 18x, which is considered fair value, with a price target raised to A$9.30 per share from A$8.30 [5][6]. Market Position - The acquisition will significantly enhance IAG's market position in WA, with RACI being the largest Home/Motor insurer in the region, holding approximately 47% market share [4][18]. - Post-acquisition, IAG's combined market share in WA is projected to reach around 55%, with 66% in Motor and 42% in Home insurance [20][21]. Profitability and Valuation - RACI's profitability metrics indicate a reported combined operating ratio (COR) of 84% and an insurance trading result (ITR) margin of 17.8% in 1H25, suggesting strong underlying performance [19][17]. - The report highlights that the targeted synergies from the acquisition are expected to outweigh the amortization charges associated with the distribution agreement [19][15].