Analyst Meny Grauman Scotiabank reduced his target on Great-West Life Inc. (GWO.TO) to $38 from $41 (Sector Perform), on iA Financial Corp. (IAG.TO) to $85 from $92 (Sector Outperform), on Manulife Financial Corp. (MFC.TO) to $28 from $30 (Sector Perform), and on Sun Life Financial Inc. (SLF.TO) to $71 from $76 (Sector Outperform).
The analyst said first quarter reporting season for Canadian lifecos will likely see a continuation of the themes and trends that developed in the second half of 2021.
"This includes the negative impact of rising mortality in the US due to the pandemic (SLF), the effects of ever stricter COVID-related lockdowns in parts of Asia (MFC and SLF), and ongoing supply chain issues across North America (IAG)," Grauman said in a note to clients. "The key difference is that while rates continue to head higher, global equity markets are no longer convinced that this move will be accompanied by exuberant post-pandemic economic growth, an outlook that is only made more complicated by the war in Ukraine."
The analyst said negative sentiment is causing a broad-sell-off in equity markets that will impact investment returns and assets under management levels across the group beyond in Q1 and beyond.
"How long this negative market sentiment will last is hard to predict, but one thing we are quite sure about is that Q1 reporting is unlikely to provide any catalyst for a turnaround," Grauman said.