Buy Genworth Financial (GNW) on Potential Australian MI IPO Despite Class Action Suit, Compass Point Says

Compass Point analyst Ken Billingsley reiterated a Buy rating and $22 price target on Genworth Financial (NYSE: GNW) saying the pullback from a potential class-action lawsuit related to its delayed IPO of its Australian Mortgage Insurance (MI) unit creates a buying opportunity.

Billingsley comments, "While other factors likely added to pressure on GNW shares yesterday, we believe this creates an attractive entry point and maintain our Buy rating on GNW. The company has filed an 8-K that announces that it has begun a preliminary “road show” of its Australian Mortgage Insurance segment as is “customary practice” in Australia, though the company has not made a final decision as to whether to pursue the IPO at this time. This is a positive step towards an IPO of the Australian MI unit as certain investors will be receiving forecasted financial information for year-end 2014 (some of which is included in the filed 8-K). If the IPO is completed, the company expects to announce its first dividend on June 30, 2014 and would represent between 50% and 70% of Net Profit After Tax (NPAT)."

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

Shares of Genworth Financial closed at $17.07 yesterday.

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