Subprime consumer lender OneMain's Q2 adjusted EPS beats estimates

Overview

• OneMain Holdings Inc Q2 adjusted EPS of $1.45 beats analyst expectations, per LSEG data

• The subprime consumer lender's net income for Q2 rises to $167 mln, up from $71 mln last year

• Managed receivables grow 7% yr/yr to $25.2 bln

Outlook

• Company did not provide specific guidance for future quarters in press release

• Company continues to focus on disciplined balance sheet management

Result Drivers

• RECEIVABLE GROWTH - Co attributes revenue increase to 7% growth in managed receivables, reaching $25.2 bln

• CREDIT IMPROVEMENT - Improved credit performance contributed to higher capital generation in Consumer and Insurance segment

• INTEREST INCOME - 10% rise in interest income driven by receivable growth and improved portfolio yield

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 11 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the consumer lending peer group is "buy"

• Wall Street's median 12-month price target for OneMain Holdings Inc is $63.00, about 6.9% above its July 24 closing price of $58.63

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release: ID:nPn7sy4N9a