Piper Sandler downgrades OneMain to Neutral, lowers price target to $49

As previously reported, Piper Sandler downgraded OneMain to Neutral from Overweight with a price target of $49, down from $55. OneMain has been dealing with rising credit losses for the past several quarters and the firm expected the company to show progressive improvement in 2023 due to tighter underwriting standards. However, the incremental progress being shown in early 2023 reversed course in late 2023 and Piper is more concerned about the performance of the front book with management indicating it has tightened even more. Meanwhile, guidance for NCOs of 7.7%-8.3% for 2024 assuming a stable economic environment presents additional risk given unemployment is below 4.0%.