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Investing.com - Scotiabank (TSX:BNS) has resumed coverage of iA Financial Group (TSX:IAG) (OTC:IDLLF) with a Sector Outperform rating and a price target of C$153.00, implying a 9% total return including dividends.
The bank’s positive outlook comes despite iA Financial’s shares already having the strongest performance among Canadian life insurance companies over the past year. Scotiabank values the company using a price-to-book value multiple of 2.0x on its 2026 book value per share estimate, representing a 12% premium to the average multiple applied to large peers.
Scotiabank cites iA Financial’s strong excess capital position as a key factor supporting its rating, noting this will likely sustain share buybacks and provides flexibility for potential mergers and acquisitions. The bank also expects recent headwinds in the U.S. business to diminish as Dealer Services gradually improves.
The financial services company continues to write highly profitable new business in the approximately 17% return on equity range, according to Scotiabank’s analysis. Further growth in iA Financial’s Segregated Fund business in Canada, where the company is a market leader and continues to gain market share, also supports the positive outlook.
Scotiabank expects iA Financial shares to outperform peers throughout its forecast period, supported by the company’s strong distribution capabilities and improving business fundamentals.
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