Market Overview

JPMorgan Sees Buying Opportunity In Torchmark

JPMorgan Sees Buying Opportunity In Torchmark
Related TMK
Earnings Scheduled For February 5, 2019
Earnings Scheduled For October 24, 2018
Tracking Warren Buffett's Berkshire Hathaway Portfolio - Q4 2018 Update (Seeking Alpha)

Torchmark Corporation (NYSE: TMK) shares have been under pressure over the past month due to concerns surrounding the company’s exposure to a deteriorating credit environment and a decline in union membership.

Although the concerns are valid, investors are “drastically overestimating” the life insurance company's vulnerability, according to JPMorgan.

The Analyst 

Analyst Jimmy Bhullar upgraded Torchmark from Neutral to Overweight with an unchanged $88 price target.

The Thesis

Although Torchmark has substantial exposure to BBB bonds, is has less exposure than its peers to a credit downturn, Bhullar said in the Wednesday upgrade note. (See his track record here.) 

Torchmark’s exposure to other risky assets — like collateralized loan obligations, alternatives and mortgage loans — is marginal, and its exposure to high-yield debt is below average, the analyst said. 

The company appears better-positioned than peers to ride out credit deterioration due to its below-average asset leverage and superior cash flow, Bhullar said. 

The concerns surrounding a union membership decline and its impact on American income seem overdone, he said, adding that income has steadily grown over the past decade despite a decline in organized labor.

Price Action

Torchmark shares were trading up by 0.56 percent at $74.95 at the time of publication Wednesday. 

Related Links:

Torchmark Corporation Reports Third Quarter 2018 Results

A Q&A With The Startup CEO Disrupting The Credit Bureau With Blockchain

Latest Ratings for TMK

Jan 2019JP MorganUpgradesNeutralOverweight
Nov 2018Morgan StanleyMaintainsUnderweightUnderweight
Oct 2018SunTrust Robinson HumphreyMaintainsHoldHold

View More Analyst Ratings for TMK
View the Latest Analyst Ratings

Posted-In: Jimmy Bhullar JPMorganAnalyst Color Upgrades Analyst Ratings Best of Benzinga


Related Articles (TMK)

View Comments and Join the Discussion!

Latest Ratings

CBBMorgan StanleyUpgrades10.0
GDCredit SuisseDowngrades184.0
GEOJP MorganDowngrades26.0
TRUERBC CapitalDowngrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Volatile Start To 2019 Amid Weak China Manufacturing Data

SunTrust Cuts Netflix Price Target, Doesn't Expect Upside In Q4 Subscribers