Netcall's ROCE Trajectory: A Compounding Machine

Netcall's ROCE has grown from 9.2% to 12% over the past five years, indicating a successful reinvestment of capital at increasing rates of return. The company's current liabilities have also increased, but its business is still generating healthy returns on capital employed. This trend is promising for long-term investors, as Netcall is compounding its earnings at ever-higher rates of return.

Equitable Holdings (EQH) has made significant strides in its financial strategy with the completion of a major Individual Life reinsurance transaction with RGA. This deal, finalized in August 2025, freed over US$2 billion in capital and reduced future earnings volatility. The capital release allows EQH to commit to at least US$500 million in additional share repurchases for the second half of 2025, signaling confidence in its long-term growth outlook despite a recent quarterly net loss [1].

The reinsurance transaction is part of EQH's broader strategy to boost organic growth across its retirement and wealth management segments. The company's investment narrative recap highlights that ongoing demographic shifts and rising retirement needs will drive steady demand for their products, supporting asset growth and fee-based income. The capital release from the RGA deal bolsters EQH’s ability to reinvest or return capital to shareholders, but current short-term earnings headwinds and persistent competitive pressure in core markets remain significant near-term catalysts and risks [1].

Among recent announcements, the integration of the Plan Build API into EQH's EB360 platform stands out for its relevance to operational efficiency and advisor retention. By making processes faster and more user-friendly for brokers, EQH strengthens its value proposition in a highly competitive market and helps mitigate some pressure on margins associated with product mix and industry competition [1].

EQH's outlook anticipates $18.7 billion in revenue and $2.4 billion in earnings by 2028, reflecting an annual revenue growth rate of 10.2% and a $2.0 billion increase in earnings from the current $429.0 million. This forecast yields a $66.40 fair value, a 28% upside to its current price [1].

The company's strategic initiatives and capital release position EQH favorably for long-term investors. Despite near-term challenges, the company's robust capital position and strategic moves suggest promising growth prospects. Investors should closely monitor EQH's progress in integrating new technologies and its ability to navigate competitive pressures to assess its long-term potential.

References:
[1] https://simplywall.st/stocks/us/diversified-financials/nyse-eqh/equitable-holdings/news/did-equitable-holdings-eqh-us2-billion-capital-release-redef