J.P. Morgan Reiterates Neutral on CNO Financial (CNO)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on CNO Financial Group (NYSE: CNO); it did not provide a price target on the stock.

The JPM analysts cited the company’s recent earnings release, which was “solid.” EPS came in to the upside along with modest revenue growth and a stable capital position. The analysts said that results are slowly improving, though sup-par margins are expected to remain and that limits upside in the name.

They also noted that management has raised rates and pulled back from their more competitive product lines, so profitability is expected to gradually improve.
Be that as it may, given current sales levels, it will take significant time for “new business to offset the drag from low-margin older blocks.”

The JPM analysts forecast the company’s “ROE to remain in the mid-single digits for the next several years, which is likely to preclude material near-term expansion in the P/BV multiple.”