In a report released yesterday, Tom Mackinnon from BMO Capital maintained a Buy rating on Manulife Financial (MFC – Research Report), with a price target of C$41.00.
Tom Mackinnon has given his Buy rating due to a combination of factors that underscore Manulife Financial’s strong performance and promising outlook. The company’s core earnings per share (EPS) exceeded expectations, reporting at $0.94 compared to the anticipated $0.90/$0.91, marking a significant 20% year-over-year increase. This robust result was supported by multiple positive metrics, including superior sales growth, strong cost management (CSM) and new business CSM growth, as well as better-than-expected gross wealth and asset management (GWAM) flows. Despite some one-time items and adjustments, the underlying financial results showcase a trend of sustainable growth and operational efficiency, characterized by an improving efficiency ratio and proactive share buyback activity.
Furthermore, Manulife Financial demonstrated impressive sales and new business value (NBV) growth, particularly in the Asian market where annual premium equivalents (APE) surged by 13% year-over-year. This performance not only exceeded Mackinnon’s expectations but also marked a continuation of the momentum built in the previous year. The company’s strategic positioning yielded a substantial increase in Asia’s NBV and favorable CSM balance growth. Additionally, lower-than-expected actuarial liability on death assumptions (ALDA) hits and a solid financial condition, as indicated by the Life Insurance Capital Adequacy Test (LICAT), reinforce the optimistic outlook. These financial strengths, coupled with an attractive free cash flow yield, robust return on equity, compelling dividend yield, and effective capital management, solidify the rationale for Mackinnon’s Buy recommendation for Manulife Financial’s stock.
According to TipRanks, Mackinnon is a 5-star analyst with an average return of 15.3% and a 71.83% success rate. Mackinnon covers the Financial sector, focusing on stocks such as Manulife Financial, Fairfax Financial Holdings, and IGM Financial.
In another report released today, RBC Capital also maintained a Buy rating on the stock with a C$38.00 price target.
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Manulife Financial (MFC) Company Description:
Canada-based Manulife Financial Corp. is a financial services company, which provides financial advice, insurance and wealth and asset management products and services in Asia, Canada, the United States, and other international markets.
