On Wednesday, Piper Sandler adjusted its outlook on Axos Financial (NYSE:NYSE:AX), increasing the price target to $84 from $68 while sustaining an Overweight rating on the stock.
The firm acknowledged Axos Financial's fourth-quarter earnings per share (EPS) for the fiscal year 2024, which aligned with the general market consensus but were slightly below their expectation by one cent. Axos Financial reported an EPS of $1.80 for the quarter.
The financial institution's net interest income (NII) did not meet Piper Sandler's projections by $0.05 per share, as the net interest margin decreased by 22 basis points to 4.65%, compared to their estimate of 4.82%. However, Axos Financial's earning asset base exceeded expectations due to the company's retention of a high level of excess liquidity.
Axos Financial's provisions for credit losses were lower than anticipated, at $6 million versus the $10 million Piper Sandler projected. This reduction was attributed to a decline in non-performing assets (NPAs) and charge-offs.
Despite expenses being higher than Piper Sandler's model by $0.04, this was balanced out by a smaller provision and a lower tax rate that contributed an additional $0.03 to the EPS, compared to what Piper Sandler had forecasted.
The report from Piper Sandler also pointed out that the fee income for Axos Financial met their expectations. The lower tax rate that Axos Financial experienced during the quarter positively impacted the firm's earnings, providing a slight boost beyond the analyst's initial model.
In summary, while Axos Financial's earnings per share for the fiscal year's fourth quarter were in line with market consensus, certain financial metrics like net interest income and expenses varied from Piper Sandler's predictions.
However, better-than-expected provisions for credit losses and a favorable tax rate helped to mitigate these differences. Piper Sandler's revised price target reflects their continued confidence in the stock, supported by the company's latest financial performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.