Straw that broke the camel's back !
BMO analyst Tom MacKinnon downgraded the Canadian insurer to Market Perform from Outperform.
MacKinnon specifically pointed to the firm's disappointing disclosure on IFRS 17, which is the new accounting standards that're going into effect Jan. 2023. Upon transition to IFRS 17, Manulife (MFC) is expecting a drop of 20% in book value per share, along with a decline of 10% in core EPS, the analyst wrote in a note.
"While we believe this impact was more negative than perhaps the Street was looking for, more importantly the disclosure was lacking in detail on the size, composition and actual growth of the all-important contractual service margin," MacKinnon noted, adding that "it's best to pause and then reassess how MFC's KPI’s, including the CSM, actually unfold in 2023 under IFRS17.