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Investing.com - Evercore ISI raised its price target on Corebridge Financial (NYSE:CRBG) to $39.00 from $37.00 on Thursday, maintaining an Outperform rating following the company’s announcement of a variable annuity reinsurance transaction. The stock, currently trading at $35.01, is near its 52-week high of $35.36, according to InvestingPro data.
Corebridge revealed it had reinsured $51 billion of variable annuities to Venerable, a move that Evercore ISI believes will improve the company’s overall valuation multiple and provide financial flexibility for potential future transactions, including the possible repurchase of remaining shares from AIG (NYSE:AIG). InvestingPro analysis shows management has been actively buying back shares, with the company maintaining profitability with earnings per share of $1.17 over the last twelve months.
The transaction is expected to be breakeven to accretive to earnings per share by the end of 2026, with Evercore noting the deal should enhance Corebridge’s multiple immediately while improving its forward growth profile by eliminating a business that was experiencing approximately $5 billion in annual outflows. For deeper insights into CRBG’s valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Evercore ISI did not make immediate earnings per share adjustments, indicating that the pace of share buybacks will determine how dilutive the transaction might be to near-term earnings, though substantial buybacks directly from AIG could minimize short-term dilution.
The research firm also highlighted Corebridge’s openness to considering additional risk transfer opportunities, potentially including a significant life insurance risk transfer deal that could offer more accretive terms to earnings per share.
In other recent news, Corebridge Financial announced a significant reinsurance agreement with Venerable, a subsidiary of Apollo, to cover its entire variable annuity block, valued at approximately $51 billion. This transaction, expected to close in the latter half of 2025, is valued at $2.8 billion and is projected to generate $2.1 billion in distributable proceeds for Corebridge. The company plans to use these proceeds primarily for share buybacks, with a $2 billion repurchase program already approved. In another development, Evercore ISI has raised Corebridge Financial’s price target to $37, maintaining an Outperform rating, following adjustments in earnings estimates. The company’s recent earnings report prompted Evercore ISI to revise its financial projections, including a decrease in second-quarter earnings estimates due to lower anticipated investment returns. Additionally, Corebridge held its 2025 Annual Meeting of Stockholders, where directors were elected, executive compensation was approved, and PricewaterhouseCoopers LLP was ratified as the accounting firm. Furthermore, board committee changes were announced with Rose Marie Glazer resigning from two committees, though she remains a director candidate. These updates reflect ongoing strategic and operational changes within Corebridge Financial.
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