Intact Financial Corp T.IFC.P.G

RBC

[retiredcf]

Their upside scenario target is $255.00. GLTA

November 9, 2022
Intact Financial Corporation 
Diggin' On You: Another solid quarter

Our View: Intact continues to deliver strong fundamentals with Q3/22 results that were largely in line with our forecast and consensus. IFC’s shares have performed well this year and while the implied total return to our target is more modest, given current macro uncertainty, we still view IFC as one of our best ideas reflecting positive company and industry fundamentals; potential catalyst(s); strong defensive attributes and a reasonable valuation. Maintaining our Outperform rating, $221 target.

Key points:
Q3/22 operating EPS of $2.70 was slightly above our $2.64 forecast, but slightly below $2.76 consensus (range: $1.80 - $3.15) with the variance to our forecast primarily due to slightly higher-than-forecast net investment income and a slightly lower-than-forecast tax rate, partially offset by slightly lower-than-forecast underwriting income and other income/expense. Q3/22 direct premiums written (DPW) of $5.4B were slightly below our $5.6B forecast and $5.7B consensus.

Q3/22 combined ratio was 92.6%, in line with our 92.4% forecast and consensus of 92.7% (range: 91.3% - 97.2%). On a segmented basis, combined ratios were:

• Personal Auto (Canada) at 93.0%, worse vs. our forecast of 91.7% and 92.5% consensus;

• Personal Property (Canada) at 98.5%, worse than our forecast of 93.1% and 93.3% consensus;

• Commercial Lines (Canada) at 87.9%, better than our forecast of 89.9% and consensus of 91.8%;

• U.S. Commercial P&C at 90.5%, slightly better than our forecast of 92.8% and 93.5% consensus;

• UK&I Personal P&C at 105.5%, much worse than our forecast of 97.4% and 97.7% consensus; and

• UK&I Commercial P&C at 85.1%, much better than our forecast of 92.9% and 91.6% consensus.

  Maintaining Outperform rating and 12-month price target of $221. Introducing 2024 forecasts.

  Conference call today at 11am EST; dial-in: 1-888-664-6392 or [phone]. A live audio webcast is also available on Intact’s investor relations website.