Morgan Stanley Lowers Price Target On Reinsurance Group Of America On Seasonally Strong 4Q Results

In a report published Tuesday, Morgan Stanley analyst Nigel Dally reiterated an Underweight rating on

, but lowered the price target from $85.00 to $84.00. In the report, Morgan Stanley noted, “We are Underweight RGA given our view that the risk profile has deteriorated somewhat as the company has expanded into more nontraditional, more volatile product categories, and international markets in effort to drive growth. This quarter, core earnings ran ahead of expectations, benefiting from seasonally favorable mortality trends in both the US and Europe, which more than offset shortfalls in other business lines. However, even after the strong result this quarter, we remain cautious on the outlook given our continued concerns around exposures to higher-risk product lines including long-term care, Australia disability, and UK critical illness, which along with the more challenging growth environment and FX risks have the potential to weigh on valuation.” Reinsurance Group of America closed on Monday at $84.15.