CNO Financial Group Inc CNO's return to growth could be gradual but signs of a rebound should positively catalyze the stocks and help narrow the trading gap its shares has with respect to the financial services distributors, an analyst at William Blair said.
William Blair's Adam Klauber initiated coverage of CNO Financial with an Outperform rating.
Having repositioned over the last decade to place it on a firmer financial footing, CNO Financial is primed to enter a growth phase, driven by re-energized distribution strategy and a broader product mix tailored toward baby boomers, Klauber said in a note.
The company is well-positioned to serve the underserved middle-income Americans, who are largely underinsured and/or do not receive financial guidance, and are at or near retirement, the analyst said.
Klauber sees several factors suggesting that the company's growth profile is poised to improve, with the company focusing on the strong secular growth trends in the senior middle-income market. The company is re-energizing its captive agency force by shifting focus toward retention and experience, the analyst said.
"We believe the stock has the potential to be revalued upward similar to other undercovered ϐinancial services distribution plays (e.g., Ameriprise Financial and Primerica)," the note said.
The Price Action
CNO Financial shares are up about 10 percent over the past year.
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