More Details 09:41 AM EDT, 09/23/2022 (MT Newswires) -- National Bank of Canada said Intact Financial Corporation (TSX: IFC) merits a premium valuation as it expects the company to successfully integrate and operate RSA Insurance Group's Canada as well as the UK and international operations and produce operating return on equity in the mid-teens through 2023 and beyond.
The bank said in a note that Intact reiterated its 12-month outlook and outlined ambitious medium to long-term outlook at the 2022 Investor Day on Sept. 22.
It noted that Intact's management spoke about profitable growth with combined ratio of low 90s in the UK and international segment by 2025, and increasing Canadian premiums from $14 billion in 2022 to $20 billion by 2027.
The bank also noted that Intact aims to double specialty premiums to $10 billion with sub-90 combined ratio by 2030 and that management highlighted significant M&A opportunity remains.
The bank said it is confident in management's ability to execute due to Intact's track record of achieving more than 19% internal rate of return over the last nine transactions, the better-than-expected value created at RSA Insurance as Intact upped its synergy target to $350 million from $250 million, and the company's strong balance sheet.
The bank applauded management's focus on the UK profit-play near term, which it said can evolve to a growth-play in 2025 and beyond. The bank also noted that Intact's aim to increase Canadian premiums to $20 billion assumes about 4% annual organic growth and taking 3-4% points of market share over the next five years.
National Bank reiterated its Outperform rating on Intact and the price target of $230.00 per share.
----------------------------------------------------------------
12:28 PM EDT, 09/23/2022 (MT Newswires) -- BMO Capital Tom MacMahon is increasing 2023E operating EPS estimates by 4% with target price increasing accordingly to $230, reflecting increased RSA acquisition synergy/accretion targets announced at the lifeco's Investor Day.
"The clear roadmap for strengthening its outperformance in Canada, improving bottom line in UK&I, and capitalizing on opportunities in specialty lines, gives us greater confidence in IFC's ability to continue to achieve its reiterated 10% operating EPS growth objective annually, over time,"MacMahon explained.
BMO has an Outperform on Intact Financial.
Price: 198.11, Change: -0.69, Percent Change: -0.35