Axos Financial (AX) PT Raised to $110 at Raymond James

Raymond James analyst Michael Rose raised the price target on Axos Financial (NYSE: AX) to $110.00 (from $100.00) while maintaining a Strong Buy rating.

The analyst comments "We reiterate our Strong Buy rating on shares of AX, and raise our price target to $110 following noisy F3Q26 results, where credit migration likely weighs on shares in today’s trading despite broadly favorable trends. For investors looking for an NII growth engine, we continue to see AX as one of the best options, where it continues to generate outsized loan growth while maintaining a premium NIM. Importantly, while industry competition has heated up, providing funding challenges for AX's elevated pace of growth, the bank has largely solved for this given two large deposit acquisitions (Jenius, Capital One), providing significant liquidity to fund growth for the foreseeable future. This led to some noise this quarter as it proactively paid down higher cost deposits with borrowings in anticipation of the Jenius deal close, leading to a smaller AEA base and rare NII miss. However, the forward outlook remains intact, where we give minimal credit for potential to reprice these new deposit verticals lower, or accelerate growth, as it continues to evaluate potential M&A opportunities as well. As noted, credit migration this quarter may raise caution flags for some, where it charged-off one larger legacy issue, and a new C&I issue led management to move to nonaccrual status. The bank continues to take a proactive and aggressive approach to credit management, where we expect loss content to remain muted and see its portfolio as well-underwritten. We think these two issues are isolated and not indicative of broader pressures within the portfolio. Looking forward, we expect it to maintain a ~47% efficiency ratio, supporting a +1.6% ROAA, high-teens ROATCE, and mid-to-high teens compounding TBV growth. All in, combining the aforementioned positive factors with its attractive P/E valuation relative to its premium profitability leaves the risk/reward favorable in our view."

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