JPMorgan Cuts Rating on OneMain (OMF) as Borrower Pressures Remain in Focus

OneMain Holdings, Inc. (NYSE:OMF) is included among the 15 Dividend Growth Stocks with the Highest Growth Rates.

On January 12, JPMorgan analyst Richard Shane downgraded OneMain Holdings, Inc. (NYSE:OMF) to Underweight from Neutral, while raising his price target to $65 from $59. The change came as JPMorgan updated its consumer finance ratings ahead of Q4 earnings.

In his note, Shane warned that OneMain’s customer base could run into more pressure if prices stay high and wage growth “remains muted.” He added that tighter immigration policies could offer some support for wages, particularly for hourly and blue-collar workers, but still sees the overall setup as challenging for the company’s borrowers.

In other news, Bloomberg reported on January 14 that alternative asset manager TPG Inc. is significantly expanding its loan purchases from OneMain, as private credit firms push deeper into consumer lending, an area traditionally dominated by banks.

Under a forward-flow agreement, TPG is expected to buy about $2.4 billion of OneMain’s loans on a continuing basis through June 2028, according to a statement seen by Bloomberg. That deal comes on top of the $1.3 billion the two sides had already agreed to, a TPG representative told Bloomberg. OneMain mainly focuses on personal and auto loans for non-prime borrowers.

In forward-flow arrangements like this, an asset manager agrees to buy loans before they are originated. For OneMain, it means the loans can move off the balance sheet more quickly, which helps free up capital and supports additional lending.

OneMain Holdings, Inc. (NYSE:OMF) is a financial services holding company that provides personal loans, auto financing, and credit cards. It also offers optional add-on products, runs a financial wellness program, services loans, and participates in acquisitions and asset sales.

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