UPDATE: Goldman Sachs Reiterates Buy Rating, Raises PT on CNO Financial Group

In a report published Wednesday, Goldman Sachs Group reiterated its Buy rating on CNO Financial Group (NYSE: CNO), and slightly raised its price target from $10.00 to $11.00.Goldman Sachs noted, “As we have previously noted, we thought CNO was positioning itself to recalibrate its capital structure. That said, Tuesday's capital recalibration announcement occurred quicker than we envisioned (we expected June 2013 when convert could be forced) as CNO, in our view, is opportunistically executing the plan post rating agency upgrades coupled with favorable debt markets. We believe CNO's plan enhances its capital structure and financial flexibility (note CNO also reiterated 2012 buyback guidance of $150mn to $170mn, 9% of market cap) while accelerating EPS growth and ROE. Based on the current plan we increase our 2012 to 2014 EPS to $0.77, $1.01, and $1.18 from $0.75, $0.90, and $1.05, respectively. We note the following proforma metrics: (1) YTD it is 9% accretive to EPS and enhances ROE by 40bp, (2) 36.4mn reduction in diluted shares, or 12% of total, (3) no change in interest expense despite a 440bp increase in debt-to-cap as 160bp decrease in cost of debt offsets incremental debt, and (4) despite $181mn reduction in equity, accretive to diluted book value/share.”CNO Financial Group closed on Tuesday at $8.96.