Evercore ISI Downgrades CNO Financial Group (CNO) to Underperform, 'Fairly Valued on GAAP, but Expensive on FCF'

Evercore ISI analyst Thomas Gallagher downgraded CNO Financial Group (NYSE: CNO) from In Line to Underperform with a price target of $26.00 (from $24.00).

The analyst comments "Following a strong ’23 year for the CNO stock, and after re-evaluating relative value across the sector considering free cash flow as our primary valuation driver, we downgrade our rating on the stock from In line to Underperform. The setup for 4Q23 GAAP earnings should be favorable, given some seasonal fee revenue tailwinds and the fairly constructive EPS guide that CNO provided with 3Q earnings. However, since we believe the foundational valuation measure should be based on the ongoing distributable free cash flow, and that result should come in at around $190mm for 2023, or around 55% of its GAAP EPS guidance, we see the 16x current multiple of FCF as overvalued vs. the current peer average of under 10x."

For an analyst ratings summary and ratings history on CNO Financial Group click here. For more ratings news on CNO Financial Group click here.

Shares of CNO Financial Group closed at $27.30 yesterday.

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