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On Friday, BMO Capital Markets adjusted its outlook on Manulife Financial shares, increasing the price target from Cdn$50.00 to Cdn$52.00, while reiterating an Outperform rating. The revision reflects the firm’s recognition of the insurer’s continuous strong performance and the potential for further valuation re-rating. According to InvestingPro data, Manulife’s stock has delivered an impressive 38.55% return over the past year and is currently trading near its 52-week high of $33.07.
Manulife’s fourth quarter of 2024 results were particularly notable, showcasing a substantial 62% year-over-year increase in Asia sales and a 35% growth in new business CSM. The company’s overall revenue growth reached 35.55% in the last twelve months, according to InvestingPro analysis. Additionally, the company reported impressive remittances totaling $7 billion. After accounting for a $0.75 billion reinsurance transaction that freed up capital, these remittances represent 90% of Manulife’s core earnings for the year.
The firm’s updated price target of Cdn$52.00 is based on an 11 times multiple of Manulife’s estimated 2026 core earnings per share (EPS) and 1.85 times the first quarter of 2026 estimated book value per share (BVPS). Currently trading at a P/E ratio of 15.99x, BMO Capital anticipates a potential re-rating of the company’s multiple from the current 11 times to a range of 12-13 times, as Manulife continues to deliver robust financial results. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued, with additional metrics and insights available in the Pro Research Report.
The report also highlighted Manulife’s shareholder-friendly actions, including a 10% dividend increase and a 137% Life Insurance (NSE:LIFI) Capital Adequacy Test (LICAT) ratio, which demonstrates strong capitalization. Furthermore, the company’s commitment to a 3% Normal Course Issuer Bid (NCIB) aligns with its strategic priorities and underscores its financial health.
Manulife Financial’s positive momentum and strategic financial management have positioned the company favorably for future growth, as reflected in the upgraded price target from BMO Capital Markets.
In other recent news, Manulife Financial Corporation (NYSE:MFC) has announced the completion of a reinsurance transaction with Reinsurance Group (NYSE:RGA) of America, involving segments of its long-term care business. This move, effective January 1, 2025, is part of Manulife’s strategy to optimize its insurance portfolio and enhance shareholder value. The financial details of the transaction were not disclosed. Additionally, Manulife has appointed Nancy Carroll and John Montalbano to its Board of Directors, effective February 28, 2025. Carroll brings extensive legal expertise in insurance and banking sectors, while Montalbano has a strong background in wealth and asset management. Carroll will join the Audit Committee and Corporate Governance and Nominating Committee, while Montalbano will serve on the Management Resources and Compensation Committee and Risk Committee. These appointments are expected to strengthen the company’s governance and strategic planning.
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