Raymond James Raises TargetPlus more details from CIBC. GLTA Raymond James’ Stephen Boland to $55 from $52.50 with an “outperform” rating.
“Our view has not changed from last quarter,” said Mr. Boland. “First, the P&C insurance environment remains very positive for the insurers. There is firm market pricing across most business lines and that is expected to remain for 2024. The second factor relates to the elevated interest rate environment. Net investment income for DFY increased 17 per cent year-over-year, driven by the positive impact within the fixed income portfolio. And lastly, with the change in capital structure, DFY has over $1.3 billion in excess capital and leverage capacity to make acquisitions. While the timing is difficult to predict, we would expect DFY to be active in acquiring further brokerages and possibly other insurers (more difficult to find).”
CIBC’s Paul Holden downgraded Definity to “neutral” from “outperformer” after a “great run” while raising his target to $51 from $47.
“DFY posted very strong Q2 results and our 2025 EPS estimate increases almost 3 per cent, mostly on higher premium growth,” said Mr. Holden. “We have increased our price target from $47 to $51, on higher EPS and a higher P/E multiple (16 times versus 15 times prior). The stock is trading at nearly 16 times P/E, around the top end of where it has traded over the last year; we expect weaker Q3 results on significantly higher CAT losses and the implied return to our revised price target is only 2 per cent.”