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On Friday, TD Cowen reiterated its Buy rating on Globe Life shares (NYSE:GL) with a consistent price target of $168.00. Following a recent meeting with the company’s management, the firm’s analysts reported a positive outlook on the insurer’s prospects. With a market capitalization of $10.5 billion and an "GREAT" financial health score according to InvestingPro, the company appears undervalued based on current Fair Value estimates. The management’s commentary highlighted ongoing positive trends in new business and capital, supported by strong fundamentals including a P/E ratio of 10.5x.
The analysts at TD Cowen noted that Globe Life is experiencing an upward trajectory in key business areas, including an increase in agent count and sales trends, as well as robust statutory earnings and cash flow. The company has maintained dividend payments for 55 consecutive years and achieved revenue growth of 6.1% in the last twelve months. These factors contribute to the firm’s confidence in the company’s financial health and growth potential, with analysts forecasting earnings per share of $13.44 for fiscal year 2025.
Furthermore, the possibility of establishing a Bermuda captive was mentioned as a significant opportunity that could substantially enhance Globe Life’s long-term deployable capital. This strategic move is expected to bolster the company’s capital position and support its growth initiatives.
The optimism from Globe Life’s management comes amidst a backdrop where no adverse regulatory developments were reported. However, the analysts acknowledged that the timing of a regulatory conclusion remains uncertain.
TD Cowen’s endorsement of Globe Life’s stock reflects the firm’s belief in the insurer’s solid business momentum and strong capital trends. The $168.00 price target suggests that the analysts see considerable value in the stock, maintaining their positive stance on its investment potential.
In other recent news, Globe Life Inc. reported its fourth-quarter 2024 earnings, with earnings per share (EPS) of $3.14, surpassing analysts’ expectations of $3.12. Despite this, the company’s revenue slightly missed forecasts, coming in at $1.47 billion compared to the anticipated $1.48 billion. The company’s full-year 2024 EPS reached $12.37, exceeding both CFRA’s estimate of $12.29 and the consensus estimate of $12.34. Analyst Catherine Seifert from CFRA raised Globe Life’s price target to $130 while maintaining a Hold rating, noting the company’s strong fourth-quarter performance as a contributing factor. This performance was driven by a 4% increase in life premiums and a 7% rise in health premiums, which exceeded expectations. Looking ahead, Globe Life projects net operating earnings per share between $13.45 and $14.05 for 2025, reflecting an 11% growth at the midpoint. The company also anticipates continued growth in life and health premium revenues, with expected increases of 4.5% to 5% and 7.5% to 8.5%, respectively.
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