Market Overview

JPMorgan Sees Buying Opportunity In Torchmark

Share:
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

DateFirmActionFromTo
Jul 2019MaintainsUnderweight
Jan 2019UpgradesNeutralOverweight
Nov 2018MaintainsUnderweightUnderweight

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

StockFirmActionPT
EQIXCFRAMaintains700.0
SPGCFRADowngrades120.0
EXPECFRAMaintains130.0
MATCFRAMaintains15.0
AEMCFRAMaintains90.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
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
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com