Moshe Orenbuch, an analyst from TD Cowen, maintained the Buy rating on OneMain Holdings (OMF – Research Report). The associated price target is $54.00.
Moshe Orenbuch has given his Buy rating due to a combination of factors that suggest OneMain Holdings (OMF) is positioned to be profitable even in scenarios of credit stress. Despite tracking a slight increase in first-quarter losses, Orenbuch notes that these are largely due to older loan vintages and that the peak loss is expected to occur in the first quarter of 2024 with a low-9% handle. Orenbuch highlights that OMF is expected to maintain profitability with significant initiatives for capital return and growth in place. Moreover, the stock is currently trading at a low multiple with an attractive dividend yield of approximately 8%, which further supports the Buy rating.
Additionally, the report indicates that while the average personal loan net loss rate has increased month over month, this is mainly attributed to the seasoning of the new OMFIT 2023-2 trust. Importantly, the early delinquency rates have shown a decline that surpasses historical seasonality, which is a positive sign. Furthermore, Orenbuch points out that the front book, consisting of post-August 2022 originations, is performing comparably to pre-pandemic levels, which suggests a solid quality of recent originations. In the Direct Auto segment, losses have decreased month over month, and delinquency rates are in line with historical trends, presenting a stable outlook for this segment of OMF’s portfolio. These factors collectively justify the analyst’s confidence in rating OMF’s stock as a Buy.
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OneMain Holdings (OMF) Company Description:
OneMain Holdings, Inc. is a consumer finance company, which provides origination, underwriting and servicing of personal loans, primarily to non-prime customers. It operates through the following the Consumer and Insurance, and Other segments. The Consumer and Insurance segment comprises of service secured and unsecured personal loans, voluntary credit and non-credit insurance, and related products through its combined branch network, digital platform, and centralized operations. The Other segment consists of the liquidation of SpringCastle Portfolio activities and non-orginating operations. The company was founded on August 5, 2013 and is headquartered in Evansville, IN.
Read More on OMF:
- OneMain appoints Jenny Osterhout as CFO and Micah Conrad as COO
- OneMain price target lowered to $54 from $55 at Compass Point
- OneMain price target lowered to $62 from $68 at Deutsche Bank
- OneMain price target lowered to $54 from $57 at TD Cowen
- OneMain price target lowered to $57 from $61 at Stephens
