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UPDATE: Credit Suisse Reiterates On Protective Life On Announced Dai-Ichi Life Deal

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In a report published Wednesday, Credit Suisse analyst Thomas Gallagher reiterated a Neutral rating on Protective Life (NYSE: PL), and raised the price target from $53.00 to $70.00.

In the report, Credit Suisse noted, “We view the announced deal as a positive for the rest of the sector as a company with relatively high asset leverage and a decent sized VA block is being acquired at 1.67x bv and 13x 2015 P/E, both premiums to the sector (of 1.1x and 9.5x). The negative angle we thought on the Nikkei report earlier this week was that PL has historically been a savvy buyer of insurance businesses and was selling at just a modest 15-20% premium.

"Now with the $700mm to $800mm of additional proceeds, we see the ~30% premium as more reasonable. We note that this deal compares favorably to Tokio Marine's purchase of DFG in 2011, which was done at ~11x year ahead EPS estimates and 1.5x P/BV multiple with a more desirable business mix in our opinion.”

Protective Life closed on Tuesday at $58.72.

Latest Ratings for PL

Jul 2014JP MorganMaintainsNeutral
Jun 2014UBSDowngradesBuyNeutral
Jun 2014BarclaysDowngradesOverweightEqual-Weight

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Posted-In: Credit Suisse Thomas GallagherAnalyst Color Price Target Analyst Ratings


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