UPDATE: Morgan Stanley Reiterates On Genworth Financial On Multiple Concerns

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In a report published Wednesday, Morgan Stanley analyst Nigel Dally reiterated an Underweight rating on
Genworth FinancialGNW
, but lowered the price target from $19.00 to $16.00. In the report, Morgan Stanley noted, “We have been Underweight on Genworth reflecting our concerns over the impact of the FHFA capital eligibility rules, long‐term care exposures, and weak sales prospects, which we see limiting ROE improvement. Earlier this quarter, the PMIERs came out significantly more onerous than expected, while the new development in tandem with results was a sharp deterioration in long‐term care results. "Given the recent experience, management is conducting a new comprehensive review, which we expect to drive a charge against its disabled life reserves. Accordingly, while results elsewhere across the organization were generally encouraging, particularly in its global mortgage insurance operations, we view the risk‐reward on the stock to remain heavily skewed to the downside, and are reiterating our Underweight rating on the stock.” Genworth Financial closed on Tuesday at $16.26.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsMorgan StanleyNigel Dally
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