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Equitable Holdings, Inc. (EQH) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Equitable Holdings, Inc. (EQH)

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Intrinsic Value (DCF)

Current$47.74
→
Intrinsic$76.19
+60%
$53.12$76.19$120.05
Market implies 1% growth for 5 years
DCF analysis suggests EQH could have 60% upside at 8% growth — verify assumptions match your view.
At $48, the market prices in only 1% growth — below historical 8%, suggesting low expectations.
Range: Bear $53 → Bull $120. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →4%6%8%10%
8%$90$98$106$115
10%$65$70$76$82
12%$51$55$60$64
14%$42$46$49$53

Bull Case

  • Bull case ($120) offers 151% upside at 10% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($53) with 6% growth, 12% discount rate
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5-Year Net Income Projection

Year 1$1.41B
Year 2$1.52B
Year 3$1.65B
Year 4$1.78B
Year 5$1.92B
Terminal$28.26B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$1.31BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

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Frequently Asked Questions

Is EQH stock undervalued or overvalued?
🟢 UNDERVALUED

EQH trades at $47.74 vs. our DCF-derived intrinsic value of $76.19, implying +56% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of EQH's future cash flows. The bear case ($56.06) still suggests upside, providing margin of safety.

What is EQH's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.31B, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-1.01B net debt and dividing by 0.32B shares: Bear $56.06 | Base $76.19 | Bull $103.12. Current price $47.74 implies +56% to base case.

How is EQH's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($23.73B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.