Canaccord Upgrade Canaccord Genuity analyst Scott Chan expects Canadian lifecos to see “solid” earnings per share growth of 30 per cent year-over-year when the sector’s first-quarter earnings season begins on May 5, “benefiting from significant impact at the start of pandemic.”
“Similar to Banks, we believe Lifecos are back on track to achieve their medium-term targets,” he said. " Heading into the quarter, we made minor changes (e.g., positive global equity markets, negative FX impact) that were relatively net neutral to our Q1 and annual forecasts. We did roll forward our valuation one quarter that resulted in increasing our target prices (average) by 4 per cent.
“In Q1, Lifeco shares significantly outperformed, benefiting from higher yields and a steeper yield curve. Currently, Lifeco shares trade attractively with a P/E (NTM) of 8.9 times (12-per-cent discount to 5-year average) with solid excess capital towards flexibility for deployment.”
Mr. Chan made the following target price changes:
- Sun Life Financial Inc. ( “buy”) to $72 from $69. Average: $69.77.