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Axos Financial stock price target raised by Piper Sandler on 3Q24 beat

Published 2024-05-01, 09:44 a/m

On Wednesday, Piper Sandler adjusted its outlook on Axos Financial (NYSE:NYSE:AX), increasing the price target to $68 from $65 while sustaining an Overweight rating on the company’s stock. This revision follows Axos Financial's release of its fiscal third-quarter 2024 earnings, which surpassed expectations.

Axos reported earnings per share (EPS) of $1.91 for FY 3Q24, outperforming Piper Sandler's estimate by $0.19 and the consensus on Wall Street by $0.21. The firm attributed the positive results to a significant jump in net interest income (NII), which contributed an additional $0.16 per share. The NII was bolstered by a 32 basis points surge in the margin to 4.87%, which was notably higher than Piper Sandler's projection of 4.63%. This increase was partly due to the full quarter impact of accretion on loan pools acquired from the FDIC.

Additionally, the provision for credit losses was less than anticipated, adding $0.05 to the EPS. Axos set aside $6 million, which was $4 million lower than Piper Sandler's forecast. This was supported by a reduction in nonperforming assets (NPAs) and manageable levels of charge-offs.

Fee income for Axos also exceeded expectations, contributing an additional $0.03 to the EPS. However, the company's expenses were higher than Piper Sandler had modeled, which detracted $0.07 from the EPS. A lower tax rate than projected provided a further $0.02 boost to EPS relative to Piper Sandler's model.

Piper Sandler's increased price target reflects the firm's positive assessment of Axos Financial's performance in the most recent quarter, marked by strong earnings and favorable financial metrics.

InvestingPro Insights

In light of Piper Sandler's recent adjustment of Axos Financial's price target, it's worth noting some key metrics and insights from InvestingPro. Axos Financial is currently trading at a low P/E ratio of 7.5 relative to its near-term earnings growth, indicating potential undervaluation. The company's PEG ratio, which stands at an attractive 0.13, further emphasizes its growth potential relative to its earnings. Additionally, with a substantial 35.68% price increase over the last six months, Axos has demonstrated strong market performance.

InvestingPro Tips suggest that while Axos Financial has weak gross profit margins, analysts are optimistic about the company's profitability this year, with the company already profitable over the last twelve months. It's also worth noting that Axos does not pay a dividend, which could be a consideration for income-focused investors. For those interested in digging deeper, InvestingPro offers several additional tips for Axos Financial that can be accessed through their platform.

For readers looking to leverage these insights, InvestingPro is currently offering a special promotion. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This could be a valuable resource for those wanting a more comprehensive analysis of Axos Financial's financial health and future prospects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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