RBC Just Upgraded Sun Life Financial, Expects Growth In Asian And Wealth Management Businesses

In a report published Wednesday, RBC Capital analyst Darko Mihelic upgraded the rating on

from Sector Perform to Outperform. The price target was raised from CAD44 to CAD46. The analyst believes that the strong fundamental drivers for the company are not fully reflected in the stock valuation at present. According to the analyst, the company is well positioned to report higher earnings, growth and ROEs, while risks are expected to decline over time. In fact, the analyst believes that the stock could see higher than estimated upside once the higher ROEs and earnings being to flow. However, since institutional outflows at MFS Investment Management (MFS) to "continue to be a drag," it is important for the company to achieve an improvement in institutional flows in this business. "Nonetheless, we believe retail net flows continue to be good and for the month of April alone, we estimate positive net mutual fund flows of approximately $2 billion for MFS (this would compare to $4 billion of total retail net sales in Q1/15)," the RBC Capital report said.