Definity Financial Corp T.DFY

Other Targets

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Scotia’s Phil Hardie cut his Definity Financial Corp.  target to $51 from $52 with a “sector outperform” rating. Other changes include: Raymond James’ Stephen Boland to $52.50 from $46 with an “outperform” rating, BMO’s Tom MacKinnon to $48 from $44 with a “market perform” rating and Jefferies’ John Aiken to $43 from $44 with a “hold” rating. The average is $49.14.

“While the headline result fell short of expectations, underwriting income and core fundamentals were solid,” said Mr. Hardie. “We believe the bar was set relatively high given the recent stock performance and valuation, and we are not surprised to see the mixed result drive near-term volatility. That said, we saw nothing in the results that would make us question our outlook or key underlying investment thesis on the name. Operating EPS was below Street expectations; however, the majority of the miss was driven by lower-than-expected distribution income. Management maintained its prior full-year guidance for distribution income, giving us confidence the slower-than-expected start to the year was largely a seasonal influence not reflected in Street estimates. Three unambiguous positives included: 1) solid underwriting with a combined ratio of 94 per cent, 2) 2.5-per-cent sequential growth in BVPS, and 3) better than expected personal auto performance.”