Morgan Stanley Lowers Price Target On StanCorp Financial Group As Disappointing Guidance Overshadows Strong Result

In a report published Friday, Morgan Stanley analyst Nigel Dally reiterated an Equal-Weight rating on

, but lowered the price target from $67.00 to $64.00. In the report, Morgan Stanley noted, “The overall thesis for StanCorp is that the company has emerged from a challenging environment of escalated claims and weakness in premiums, and is poised for more predictable, stronger future results. This quarter's results were consistent with this thesis, as the company once again reported a seasonally strong fourth quarter results that ran ahead of both our estimate and the consensus. That said, management is guiding towards flat EPS growth in 2015, which is likely to come as a negative surprise to many investors. While capital management is expected to remain a tailwind, unfavorable accounting changes and the absence of further improvements in the fundamentals of its insurance business are offsets. Further, given the strong relative performance of the stock heading into the results, we expect a shift in inventor sentiment will lead it to be under pressure near-term, especially as we head into the seasonally unfavorable first half of the year.” StanCorp Financial Group closed on Thursday at $64.49.