JPMorgan Sees Buying Opportunity In Torchmark
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
Date | Firm | Action | From | To |
---|---|---|---|---|
Jul 2019 | Morgan Stanley | Maintains | Underweight | |
Jan 2019 | JP Morgan | Upgrades | Neutral | Overweight |
Nov 2018 | Morgan Stanley | Maintains | Underweight | Underweight |
View More Analyst Ratings for TMK
View the Latest Analyst Ratings
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted-In: Jimmy Bhullar JPMorganAnalyst Color Upgrades Analyst Ratings Best of Benzinga