OneMain Q2 revenue rises on receivables, yield growth

Overview

• U.S. nonprime lender's Q2 revenue rose 6% yr/yr to $1.6 bln

• Adjusted EPS for Q2 was $1.31, beating analyst expectations

• Company repurchased $32 mln in shares and declared $1.05 dividend

Outlook

• Company did not provide specific guidance for future quarters or the full year in the press release

Result Drivers

• RECEIVABLES AND YIELD GROWTH - Revenue growth was driven by higher managed receivables and improved portfolio yield

• HIGHER CREDIT COSTS - Provision for finance receivable losses rose due to higher net charge-offs and increased allowance for loan losses

• OPERATING EXPENSES - Operating expenses increased 6% due to receivable growth and strategic investments

Company press release: ID:nPn2QHM4Va

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 1 "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 $68.00, about 9.3% above its July 28 closing price of $62.24

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

Reuters Recommended Reads

• July 27 - Happen Q2 EPS rises 52% as loan originations grow

• July 29 - International Personal Finance H1 profit falls as growth investment weighs

• July 27 - Principal Financial profit rises on higher premiums, strength in retirement business

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)