Globe Life Inc’s GL outlook is positive in both life and P&C (property and casualty) personal lines insurance, according to Credit Suisse.
The Analyst
Credit Suisse’s Andrew Kligerman initiates coverage of Globe Life with an Outperform rating and a price target of $114.
The Thesis
Globe Life has a well-established and differentiated distribution network that is “hard to replicate,” Kligerman said in the initiation note.
The company’s model is supported by strength and focus in underpenetrated markets and comprises of wholly-owned exclusive agencies that bring efficiency, low marketing costs and stable underwriting margins, the analyst mentioned.
He further wrote, “Upcoming rebranding under the Globe Life name and investments in data analytics and other tech will likely further support recruitment and sales.”
Kligerman added that the company’s core insurance products were largely not sensitive to interest rates or equity markets and allowed for consistent underwriting performance.
He added that any pressure from low interest rates could be offset by Globe Life annual premium growth, strong cost controls and underwriting margin expansion.
The company’s lower pricing pressure and upper-single-digit long-term EPS growth outlook warrants the premium at which the stock is currently trading, the analyst added.
Price Action
Shares of Globe Life were up 0.79% to $95.14 at the time of publishing on Friday.
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