RBC Capital lifts Great-West Lifeco stock target to Cdn$53

On Friday, RBC Capital Markets adjusted its outlook on Great-West Lifeco Inc (TSX:GWO:CN) (OTC: GWLIF), increasing the price target from Cdn$51.00 to Cdn$53.00, while maintaining a Sector Perform rating on the company’s shares. The revision follows Great-West Lifeco’s strong fourth-quarter performance in 2024, which showcased robust growth across all business segments.

Great-West Lifeco’s Q4/24 earnings revealed that Empower, its United States retirement business, has become its largest segment, contributing approximately 32% to the company’s total base earnings. The company has indicated expectations of double-digit earnings growth in 2025, which reflects positively on the firm’s business prospects.

In addition to the promising growth forecast, Great-West Lifeco announced an increase in its quarterly dividend to $0.61 per share, surpassing analyst projections. The company’s financial strategy also includes a significant share repurchase plan, with intentions to buy back $500 million of common shares under its Normal Course Issuer Bid (NCIB). RBC Capital’s analysis incorporates an estimated $495 million for the share repurchase.

The financial services provider’s recent moves, including the dividend hike and share buyback plan, are seen as indicators of strong capital position and liquidity. These actions are interpreted as demonstrating Great-West Lifeco’s confidence in its financial health and its commitment to delivering shareholder value.

RBC Capital’s updated price target and steady rating reflect an acknowledgement of Great-West Lifeco’s solid performance in the last quarter of 2024 and its positive outlook for the coming year. The company’s strategic decisions are aimed at sustaining growth and rewarding its investors, as it navigates the financial landscape in 2025.

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