Apple edges up premarket as investors weigh estimated tariff costs, iPhone sales
On Friday, Morgan Stanley (NYSE:MS) analysts raised their rating for Corebridge Financial (NYSE:CRBG) from Equalweight to Overweight, while also increasing the price target to $43.00, up from the previous $35.00. Currently trading at $33.32 with a market capitalization of $18.5 billion, the stock has shown strong momentum with a 41% return over the past year. The upgrade reflects Morgan Stanley’s confidence in Corebridge’s strategic shift towards fee-based earnings, especially within its group insurance line of business.
Corebridge Financial has been actively adapting to market changes by decreasing its reliance on spread-based products. According to InvestingPro data, the company maintains strong profitability with a P/E ratio of 8.8x and healthy earnings of $3.72 per share. In the past year, the company has reduced its spread exposure from 51% to 44% within its group insurance segment. This move is part of a broader strategy to enhance the company’s advisory and brokerage services.
The firm’s group insurance business currently serves 1.9 million customers, with 1.7 million being in the pre-retirement phase. With annual revenue of $18.6 billion and strong cash flows, a significant portion of these customers have yet to utilize advisory services, presenting Corebridge with a substantial opportunity for growth in wealth management. Morgan Stanley anticipates this focus to contribute positively to Corebridge’s earnings per share (EPS) in the future.
The upgrade by Morgan Stanley comes as Corebridge demonstrates a nimble operating model that allows for quick adaptation to varying market conditions. With an overall "GOOD" financial health score from InvestingPro, and analyst consensus strongly bullish, the company’s targeted actions to expand its advisory and brokerage capabilities are expected to drive long-term growth in the wealth management business.
In summary, Morgan Stanley’s revised outlook for Corebridge Financial is based on the company’s successful pivot away from spread-based products towards fee-based earnings, which is likely to provide an uplift in EPS and foster growth in the wealth management sector. InvestingPro analysis reveals additional insights, including management’s aggressive share buyback program and strong profitability metrics. Subscribers can access the comprehensive Pro Research Report for deeper analysis of Corebridge’s financial health and growth prospects.
In other recent news, Corebridge Financial has been the focus of several analyst upgrades and positive outlooks. Deutsche Bank (ETR:DBKGn) upgraded Corebridge Financial shares from Hold to Buy, raising the price target to $40, citing the company’s potential for significant organic growth in 2025. This growth is expected to be driven by favorable demographics, a strong equity market, and sustained higher interest rates. Barclays (LON:BARC) also upgraded Corebridge Financial to Overweight, setting a new price target of $37.00, emphasizing the company’s potential benefits from the current high-interest rate environment and its disciplined expense management.
BMO Capital Markets initiated coverage on Corebridge Financial with an Outperform rating and a price target of $43.00. Their analysis highlights the company’s ability to generate steady cash flow and a forward free cash flow yield of over 10%. The firm acknowledged challenges such as spread pressure but indicated these are already accounted for in market expectations. Barclays noted the potential for accretive reinsurance transactions, which could enhance earnings per share and reduce investment leverage. Deutsche Bank’s analyst also mentioned the anticipated announcement of a new efficiency plan and potential divestitures as near-term catalysts. These developments suggest a positive outlook for Corebridge Financial, with analysts highlighting various strategies and market conditions that could drive future growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.