Scotiabank resumes Manulife Financial stock coverage with Sector Outperform rating

Published 31/07/2025, 10:02
Scotiabank resumes Manulife Financial stock coverage with Sector Outperform rating

Investing.com - Scotiabank (TSX:BNS) resumed coverage of Manulife Financial (TSE:MFC) (NYSE:MFC), a $52.35 billion market cap insurer with a "GREAT" financial health rating according to InvestingPro, with a Sector Outperform rating and a price target of C$47.00, implying a 14% total return including dividends.

The bank’s positive outlook is based on continued strength in Manulife’s higher-growth businesses, particularly its Asia segment and Global Wealth and Asset Management division, both of which have demonstrated strong momentum in recent quarters. This momentum is reflected in the company’s impressive 9.27% revenue growth over the last twelve months.

Scotiabank also cited Manulife’s de-risking initiatives that have led to a structurally lower risk profile, which could improve further with additional reinsurance transactions.

The financial institution noted Manulife’s improving return on equity trajectory as another factor supporting its constructive view on the stock.

Despite favorable revaluation of Manulife shares relative to its price-to-book value multiple in recent years, Scotiabank observed that MFC has seen the lowest upside of all Canadian life insurance company stocks over the past year, suggesting room for relative outperformance.

In other recent news, Manulife Investment Management has announced the formation of Lakefront Fiber, LLC, a joint venture with Midwest Fiber Networks. This partnership is set to enhance fiber connectivity for a range of customers, including hyperscale, carrier, and municipal entities. The collaboration leverages Midwest Fiber Networks’ expertise in fiber development and operation. Lakefront Fiber’s establishment is part of Manulife IM’s strategy to expand its digital infrastructure focus, concentrating on critical fiber assets. These assets are supported by long-term agreements with financially stable parties. Recep Kendircioglu, Global Head of Infrastructure at Manulife IM, noted that this collaboration builds on a long-standing relationship with Midwest Fiber Networks. The venture aims to support the development of an extensive pipeline for Lakefront Fiber. These recent developments highlight Manulife IM’s commitment to advancing its infrastructure strategy.

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