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Investing.com - Barclays (LON:BARC) raised its price target on Corebridge Financial (NYSE:CRBG) to $45.00 from $38.00 on Thursday, maintaining an Overweight rating following the company’s announcement of a variable annuity reinsurance transaction. The stock, currently trading at $34.92, is near its 52-week high of $35.36, with InvestingPro data showing management has been actively buying back shares.
Corebridge Financial announced a deal with Venerable involving $51 billion of assets under management that would completely eliminate the company’s exposure to individual variable annuity products. The transaction is valued at $2.8 billion, representing a 9-10x price-to-earnings multiple, compared to Corebridge’s current P/E ratio of 28.32x and price-to-book ratio of 1.6x. According to InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, though subscribers can access detailed valuation metrics and 5 additional ProTips for deeper insights.
The company expects $2.1 billion of the transaction price to be available for redeployment upon closing, which is anticipated in the third or fourth quarter of 2025. Barclays noted that variable annuity exposure has been a drag on Corebridge’s valuation, with some variable annuity peers trading as low as 2-3x price-to-earnings. The company maintains a solid financial position with an InvestingPro Financial Health Score rated as ’FAIR’ and has demonstrated profitability over the last twelve months.
Barclays estimates the transaction will result in earnings per share accretion of 1% to 2.5%. The firm also projects a valuation lift of at least 6% from the resulting mix shift in Corebridge’s business.
The research firm sees potential for an additional 10 to 15 percentage points of valuation improvement as investor interest grows, suggesting the company could trade at a modest premium to book value per share, consistent with how fixed annuity-oriented companies have traded in normal credit market conditions.
In other recent news, Corebridge Financial has announced a significant reinsurance deal involving its entire variable annuity portfolio, valued at $51 billion, with CS Life Re, a subsidiary of Venerable Holdings. This transaction, valued at $2.8 billion, is expected to generate approximately $2.1 billion in after-tax distributable proceeds for Corebridge. The company plans to use a substantial portion of these funds for share repurchases, with a $2 billion increase to its share repurchase authorization already approved by the Board of Directors. Corebridge will continue to administer and service the divested policies while maintaining its diversified business model. The transaction is anticipated to impact the company’s adjusted after-tax operating income, with a projected decrease of approximately $300 million in 2026, although this impact is expected to lessen over the years. Evercore ISI has raised its price target for Corebridge Financial to $39.00 from $37.00, maintaining an Outperform rating, citing potential improvements in the company’s valuation and financial flexibility. Additionally, Corebridge recently held its 2025 Annual Meeting of Stockholders, where key agenda items, including the election of directors and executive compensation, were addressed and approved. The transaction is expected to close in phases, with different components scheduled for completion in the third and fourth quarters of 2025, pending regulatory approvals.
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