Jefferies has launched coverage of Axos Financial (AX, Financial) by giving it a Buy rating and setting a target price of $90. This move is part of the firm's comprehensive review of 32 regional and mid-cap banks, all of which they view with a favorable perspective.
Despite the unpredictable nature of tariffs, several factors are poised to benefit banks, including Axos Financial. These factors encompass potential loan growth as the U.S. sidesteps recession fears, a widening net interest margin owing to a steeper yield curve, strong credit metrics, and surplus capital which can be used strategically. The valuation of these banks is also considered attractive, according to the analyst's report.
Axos Financial stands out as one of Jefferies' preferred mid-cap stock choices alongside other notable picks, underscoring its promising investment potential.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Axos Financial Inc (AX, Financial) is $81.17 with a high estimate of $88.00 and a low estimate of $72.00. The average target implies an upside of 12.87% from the current price of $71.91. More detailed estimate data can be found on the Axos Financial Inc (AX) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Axos Financial Inc's (AX, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Axos Financial Inc (AX, Financial) in one year is $73.53, suggesting a upside of 2.25% from the current price of $71.91. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Axos Financial Inc (AX) Summary page.
AX Key Business Developments
Release Date: April 30, 2025
- Net Loan Growth: Over $700 million linked quarter.
- Net Interest Income: $275 million, up 5.3% from the prior-year period.
- Net Interest Margin: 4.78%, down 5 basis points from the previous year.
- Book Value Per Share: Increased by 19% year-over-year.
- Return on Average Common Equity: 16% for the quarter.
- Return on Average Assets: 1.8% for the quarter.
- Common Stock Repurchase: Approximately $28 million in the quarter, plus 517,000 shares for $30.3 million post-quarter.
- Total Deposits: Increased 5.4% year-over-year to $20.1 billion.
- Net Income: Approximately $105.2 million for the quarter.
- Diluted EPS: $1.81 for the quarter.
- Noninterest Expense: Approximately $146 million, up by $900,000 from the previous quarter.
- Net Annualized Charge-offs: 9 basis points, compared to 7 basis points last year.
- Nonaccrual Loans: Declined by $66.5 million linked quarter.
- Average Loan Yields: 7.99% for the quarter.
- Ending Deposit Balances: $20.1 billion, up 1% linked quarter.
- Client Margin Balances: Grew by 2.9% to $282.4 million.
- Pretax Income for Securities Business: Increased by 23.6% year-over-year to $9.1 million.
- Income Tax Rate: 29% for the quarter.
- Loan Pipeline: $2.1 billion as of April 25, 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Axos Financial Inc (AX, Financial) reported a 19% year-over-year increase in book value per share.
- The company achieved a 16% return on average common equity and a 1.8% return on average assets.
- Net interest income increased by 5.3% year-over-year to $275 million.
- Total on-balance sheet deposits grew by 5.4% year-over-year, reaching $20.1 billion.
- Axos Financial Inc (AX) successfully reduced nonaccrual loans, improving the nonaccrual loans to total loan ratio from 1.26% to 0.89%.
Negative Points
- Net interest margin decreased slightly from 4.83% to 4.78% compared to the previous quarter.
- Average loan yields declined from 8.37% to 7.99% quarter-over-quarter.
- Net annualized charge-offs to average loans increased from 7 basis points to 9 basis points year-over-year.
- The company experienced a decline in average loan yields for non-purchased loans, which stood at 7.66%.
- There was a noted increase in operating expenses, with noninterest expenses rising by $900,000 from the previous quarter.
