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On Wednesday, Piper Sandler affirmed its Overweight rating on shares of CNO Financial Group (NYSE:NYSE:CNO) with a steady price target of $42.00. The firm's stance is supported by recent developments that bolster the investment thesis for the insurance company. Key points highlighted include the end of long-term care (LTC) reinsurance dealings, which underscores the growing appeal of this type of liability.
CNO Financial, having nearly completed a year since the establishment of CNO Bermuda, is expected to be exploring further strategic steps. Moreover, the company's cost structure is anticipated to improve following recent initiatives. Another positive aspect is the robust distribution network of CNO Financial, which is being fueled by strong recruitment trends.
The valuation of CNO Financial also remains compelling, according to Piper Sandler, especially within the life insurance sector that is experiencing consolidation and showing an increased interest in owned distribution channels. These factors contribute to the scarcity value from which CNO Financial stands to benefit. The full report from Piper Sandler contains more detailed information on these takeaways.
In other recent news, CNO Financial Group demonstrated a robust performance in the third quarter of 2024. The company saw a significant year-over-year earnings growth, with operating earnings per diluted share increasing by 26% to $1.11, marking its ninth consecutive quarter of sales growth.
CNO Financial also revised its full-year 2024 earnings per share guidance upwards, reflecting the profitability of its core segments and ongoing efforts to manage expenses.
RBC Capital Markets adjusted its outlook on CNO Financial, raising the price target to $40 and maintaining an Outperform rating, based on the company's recent performance. The firm highlighted the company's Health segment and net investment income as significant contributors to this success.
In light of these recent developments, CNO Financial revised its full-year earnings and cash flow guidance upwards. The company reported a 6% increase in book value per diluted share to $35.84 and returned $107 million to shareholders.
Despite some challenges in fixed indexed annuity margins, the company recorded a record growth in annuity collected premiums and strong demand for long-term care and Medicare Supplement products.
Analysts from various firms have noted these positive trends, with some highlighting the company's strong net investment income and a $27.3 million boost in operating income from the annual actuarial review. CNO Financial is optimistic about future growth, supported by favorable macroeconomic and demographic trends.
InvestingPro Insights
The positive outlook from Piper Sandler on CNO Financial Group is further supported by several key metrics and insights from InvestingPro. CNO's market cap stands at $4.02 billion, with a P/E ratio of 15.4, suggesting a reasonable valuation relative to its earnings. The company has demonstrated strong financial performance, with revenue growth of 14.5% over the last twelve months and an impressive 19.22% growth in the most recent quarter.
InvestingPro Tips highlight CNO's commitment to shareholder value. The company has raised its dividend for 13 consecutive years, indicating financial stability and a shareholder-friendly approach. This aligns with Piper Sandler's view on CNO's compelling valuation and potential scarcity value in the consolidating life insurance sector.
Moreover, CNO's stock has shown robust performance, with a 55.69% total return over the past year and trading near its 52-week high. This strong market performance reflects investor confidence in CNO's strategic moves, including the establishment of CNO Bermuda and its focus on improving cost structure, as noted in the Piper Sandler report.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips on CNO Financial Group, providing deeper insights into the company's financial health and market position.
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