This CNO Financial Group Analyst Is Turning Bullish: Health, Life Products Exhibit 'Consistent Profitability'

CNO Financial Group Inc CNO and other financial stocks have been in focus after some of the sector’s biggest banks reported first-quarter results.

While the stock has underperformed the broader life insurance group so far this year, its attractiveness is boosted by the “increasing scarcity value” in small- to mid-cap life insurance players, according to Piper Sandler.

The CNO Financial Group Analyst: John Barnidge upgraded the rating for CNO Financial Group from Neutral to Overweight, while keeping the price target unchanged at $29.

The CNO Financial Group Thesis: “The company’s product portfolio is not over-indexed to legacy liabilities,” Barnidge wrote said in the upgrade note.

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While the long-term care (LTC) insurance products had been “persistently unprofitable,” the pandemic changed that, the analyst stated. CNO Financial Group’s LTC product “has generally low capped benefits so is more frequency than severity” and that business has support from a reinsurance relationship with RGA, he added.

CNO Financial Group’s health and life products have exhibited “consistent profitability,” Barnidge further said.

“With CNO now a couple quarters removed from completion of establishing CNO Bermuda, we would not be surprised to see CNO working on pursuing additional optionality for its liability profile with our expectation being this could include the Bermuda entity migrating out of just supporting annuities,” the analyst wrote.

CNO Price Action: Shares of CNO Financial Group had risen by 0.06% to $25.23 at the time of publication on Tuesday.

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