Sprouts Farmers Market closes $600 million revolving credit facility
On Tuesday, Evercore ISI adjusted its price target on Globe Life (NYSE: NYSE:GL) shares, reducing it slightly from $143.00 to $141.00 while maintaining an Outperform rating. Currently trading at $120.72 with a market capitalization of nearly $10 billion, Globe Life maintains a P/E ratio of 9.74, which according to InvestingPro analysis, indicates attractive valuation relative to its near-term earnings growth potential. The revision follows Globe Life’s first-quarter earnings for 2025, which revealed weaker-than-expected performance in the health insurance sector. According to Evercore ISI, health insurance earnings decreased by approximately 8% from the previous quarter, primarily due to higher-than-anticipated claims in Medicare supplement (med supp) insurance.
Despite the lower earnings in health insurance, Globe Life’s overall earnings guidance for the year remains unchanged. This is partly due to a significant life insurance reserve release, which is expected to contribute at least $0.60 per share, compensating for the subdued health earnings. InvestingPro data reveals that Globe Life maintains a "GREAT" overall financial health score of 3.05 out of 4, with particularly strong marks in profitability (3.58) and relative value (3.26). Evercore ISI analysts have slightly increased their full-year 2025 earnings projections for Globe Life but have decreased their second-quarter earnings forecast by 5-6% and by roughly 2% for 2026.
The company anticipates that health earnings will recover from the current low, with margins expected to be between 24-26% for the full year 2025, compared to 23% in the first quarter. The bulk of the margin improvement, however, is likely to happen in 2026 and into 2027 as a result of repricing actions that have been filed this year.
Evercore ISI suggests that the first quarter may represent the lowest point for Medicare supplement earnings. If the situation deteriorates further, Globe Life may consider exiting the product line and market. Nonetheless, the firm anticipates a return to target margin levels by the second half of 2026 and into 2027.
Additionally, there is potential for positive developments regarding Globe Life’s capital strategy. The company is expected to announce its plans for utilizing its Bermuda captive reinsurance vehicle along with its second-quarter results. While Evercore ISI has not factored in significant benefits from this move, it could potentially accelerate share repurchases in 2026 and 2027, offering possible valuation upside for the company’s stock. InvestingPro indicates management has been actively buying back shares, while maintaining an impressive 55-year streak of consecutive dividend payments with 9 years of consecutive increases. For deeper insights into Globe Life’s valuation and growth prospects, including exclusive ProTips and comprehensive financial analysis, check out the full Pro Research Report available on InvestingPro.
In other recent news, Globe Life Inc. reported its first-quarter earnings for 2025, revealing a shortfall in earnings per share (EPS) estimates. The company posted an EPS of $3.07, which was below the forecasted $3.24. However, Globe Life’s revenue exceeded expectations, reaching $1.48 billion against a forecast of $1.45 billion. The life insurance premium revenue grew by 3% to $830 million, and health insurance premium revenue increased by 8% to $370 million. Despite the EPS miss, Globe Life projects net operating earnings per share for the full year 2025 to range between $13.45 and $14.50, indicating an 11% growth at the midpoint. The company anticipates life premium revenue growth of around 4% and health premium revenue growth between 7.5% and 8.5%. Additionally, Globe Life is focusing on innovation, particularly in underwriting automation and technology enhancements, to boost its operational performance. The company also plans to continue its share repurchase program, having repurchased approximately 1.5 million shares in the first quarter of 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.