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UPDATE: Credit Suisse Initiates Coverage on Fidelity & Guaranty Life

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In a report published Wednesday, Credit Suisse analyst Thomas Gallagher initiated coverage on Fidelity & Guaranty Life (NYSE: FGL) at Outperform, establishing a $21.00 price target.

According to the report, the analyst's target price implies that FGL trades at .93x their estimate of 2015 book value vs. peers at 1x (and 10.2x our 2015 eps estimate vs. peers at 9.3x), in line with the valuation implied by their price to book versus ROE regression.

“Although FGL's current ROE of ~8% lags peers, we expect the FGL ROE to reach 10% headed into 2016, with room to grow off that as the company deploys its current excess capital position representing nearly 40% of its GAAP Book Value,” the report noted. “Our base case is that FGL will be able to regain historical levels of market share within the growing FIA market. We see spreads benefiting from the company re-engineering its investment portfolio.”

FGL closed Tuesday at $19.58.

Latest Ratings for FGL

DateFirmActionFromTo
Nov 2015DowngradesOutperformSector Perform
Nov 2015DowngradesOutperformNeutral
Jul 2015UpgradesNeutralOutperform

View More Analyst Ratings for FGL
View the Latest Analyst Ratings

Posted-In: Credit Suisse Thomas GallagherAnalyst Color Initiation Analyst Ratings

 

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