UPDATE: Keefe, Bruyette & Woods Assumes Coverage on Symetra Financial Following Strong Quarter

In a report published Thursday, Keefe, Bruyette & Woods analyst Ryan Krueger assumed coverage on Symetra Financial SYA with a Market Perform rating and $22.00 price target. In the report, Keefe, Bruyette & Woods noted, “Very strong result from SYA at $0.56 operating vs. $0.41 consensus. Beat was driven by favorable medical stop-loss claims (+$0.08), a low tax rate (+$0.05), and excess bond prepays (+$0.02). While certainly encouraging (esp. stop-loss), we view much of the 1Q14 EPS outperformance as unsustainable. SYA raised 2014 guidance by the amount of the beat, from $1.65-$1.85 to $1.80-$2.00. "We are assuming coverage at Market Perform with a $22 price target. We expect SYA's ROE to gradually build from 8.5% to 10% over time, reflecting capital deployment into new business and buybacks/M&A. However, at 1.0x book we view this as already priced into the shares.” Symetra Financial closed on Wednesday at $20.36.