Genworth Financial Loses 4% on Downgrade
Shares of Genworth Financial (NYSE: GNW) were trading down around four percent to $8.02 during Tuesday's afternoon trading session after an analyst at Credit Suisse downgraded the stock. Thomas Gallagher cut his rating on Genworth shares from Neutral to Underperform.
He cited risks to the company's life insurance businesses, in particular long-term cafe insurance. As one of the largest long-term care insurance companies, Genworth faces risks from policyholders living longer, according to Gallagher.
In a client note, Gallagher said that "there has been disproportionately too much emphasis placed on the housing market recovery and the impact it will have on U.S. mortgage insurance, and not enough focus on the life insurance entities."
Genworth shares have surged more than 47 percent over the last three months as investors have turned incrementally more positive on the company's mortgage insurance unit as the housing market has picked up. Despite the loss on Tuesday, GNW is still up almost seven percent in 2013 after rallying to begin the year.
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