In a report released today, David Chiaverini from Wedbush maintained a Hold rating on Axos Financial (AX – Research Report), with a price target of $62.00.
David Chiaverini has given his Hold rating due to a combination of factors, including Axos Financial’s solid recent quarter and the impact of its FDIC loan acquisition on earnings per share (EPS). The company’s net interest income (NII) and net interest margin (NIM) exceeded expectations, with NIM notably rising to 4.55%. Additionally, there was substantial annualized deposit growth, which also surpassed forecasts. Despite these positive aspects, the company did experience an increase in nonperforming assets, primarily attributed to a single loan. Nonetheless, overall credit trends showed improvement, and net charge-offs saw a decrease from the previous quarter.
Chiaverini’s analysis also considered the company’s guidance, which was largely reaffirmed, with an anticipation of high-single to low-teens loan growth for fiscal 2024. This outlook assumes diversified increases in several lending areas, balanced by expected declines in others. The FDIC loan purchase is projected to be highly accretive, enhancing NIM and contributing to the increase in Chiaverini’s core EPS estimates for fiscal 2024/2025. Despite the positive fundamental trends and accretive FDIC loan purchase, Chiaverini maintains a Neutral stance, suggesting that the current market valuation already reflects Axos Financial’s outlook, which underpins the Hold recommendation.
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Axos Financial (AX) Company Description:
Axos Financial, Inc. is a holding company, which engages in the provision of banking and financing services. It operates through the following segments: Banking Business, Securities Business, and Corporate. The Banking Business segment includes online banking, concierge banking, prepaid card services, and mortgage, vehicle, and unsecured lending through online and telephonic distribution channels. The Securities Business segment involves the clearing broker-dealer, registered investment advisor, and introducing broker-dealer lines of businesses. The company was founded on July 6, 1999 and is headquartered in Las Vegas, NV.
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