Equitable Holdings Navigates Challenges in Q1 2025 with Strategic Resilience
7min read Equitable Holdings (NYSE: EQH) released its first-quarter 2025 financial results on April 29, 2025, marking a mixed performance amid macroeconomic headwinds. While net income dipped year-over-year, the company demonstrated operational resilience through robust asset management growth, disciplined capital allocation, and strategic moves to bolster liquidity. Here’s a deep dive into the numbers and their implications for investors.
Key Financial Highlights
The quarter began with a notable decline in GAAP net income, falling to $63 million ($0.16 per share) from $92 million ($0.23 per share) in Q1 2024. However, non-GAAP operating earnings surged to $421 million ($1.30 per share), exceeding analyst expectations of $1.26. Adjusted for one-time items, earnings rose further to $1.35 per share, underscoring core operational strength.
The company’s total assets under management/administration (AUM/A) grew to $1.0 trillion, a 3% year-over-year increase, driven by strong net flows across segments:
- Retirement: $1.6 billion in inflows
- Wealth Management: $2.0 billion in inflows
- Asset Management: $2.4 billion in inflows
These figures highlight client confidence in Equitable’s investment strategies, particularly within its AllianceBernstein subsidiary, a key driver of AUM growth.
Strategic Initiatives and Capital Management
Equitable’s Q1 results were bolstered by strategic moves to enhance liquidity and flexibility:
1. Life Reinsurance Deal with RGA: The company is on track to close a transaction with Reinsurance Group of America (RGA) by mid-2025, freeing over $2 billion in capital. This move aims to reduce risk exposure and free up resources for future growth.
2. AllianceBernstein Acquisition: The purchase of $760 million in AllianceBernstein Holding units underscores Equitable’s commitment to strengthening its asset management capabilities.
3. Shareholder Returns: Despite the net income dip, the company returned $335 million to shareholders, including $74 million in dividends and $261 million in share repurchases, signaling confidence in its financial stability.
Liquidity and Balance Sheet Strength
Equitable maintained a robust balance sheet, with a combined NAIC Risk-Based Capital (RBC) ratio of 425%—well above the 200% regulatory minimum—and $1.1 billion in holding company liquidity. Additionally, its book value per common share (excluding AOCI) rose to $27.62, reflecting improved equity valuation.
Challenges and Macroeconomic Pressures
CEO Mark Pearson acknowledged heightened macroeconomic uncertainty, including interest rate fluctuations and market volatility, as key challenges. These factors contributed to the decline in GAAP net income, though non-GAAP metrics and AUM growth suggest underlying stability.
Analyst and Market Outlook
Analysts remain cautiously optimistic. While full-year 2025 revenue estimates were trimmed to $15.91 billion (from prior expectations), the consensus for EPS rose to $6.08, driven by cost discipline and strategic initiatives. Notably, the average one-year price target of $63.33 (vs. a current price of $50.41) implies a 25.64% upside, reflecting confidence in Equitable’s long-term prospects.
Conclusion
Equitable Holdings’ Q1 2025 results reveal a company navigating short-term challenges while positioning itself for sustained growth. Despite the GAAP net income decline, the surge in non-GAAP earnings, strong AUM inflows, and strategic capital moves—such as the RGA deal—paint a picture of operational resilience. With $1.0 trillion in AUM, robust liquidity, and shareholder-friendly policies, Equitable remains well-equipped to capitalize on opportunities in retirement, wealth management, and asset management.
For investors, the $2 billion capital release from RGA and the $760 million AllianceBernstein stake purchase are critical catalysts. While macroeconomic risks persist, Equitable’s diversified revenue streams and disciplined capital allocation suggest it’s poised to outperform peers in a volatile market. The 25.64% upside potential highlighted by analysts, coupled with a $27.62 book value per share, reinforces its appeal as a defensive yet growth-oriented financial services play.
In a sector marked by uncertainty, Equitable’s Q1 results underscore its ability to balance near-term headwinds with long-term strategic vision—a recipe for steady progress in 2025 and beyond.
