BTIG Slices PT on Genworth (GNW) to $5; Sees Challenges Priced into Stock
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BTIG affirms its Buy rating on Genworth Financial (NYSE: GNW) and halves its price target from $10 to $5 following Q4 results issued late Thursday.
Analyst Mark Palmer commented: The headlines arising from Genworth Financial's (GNW) 4Q15 report have inevitably focused on the company's decision to suspend all sales of traditional life insurance and fixed annuity products this quarter given the impact of the company's below investment grade credit ratings as reflected in recent sales volumes. However, we believe that move is overshadowing several of the positives emerging from GNW's report, most notably much-needed stability in the results of its troubled long-term care (LTC) unit as well as its Australia and Canada mortgage insurance units.
On the firm's Buy rating, Palmer said: While the company faces significant challenges, we believe their impact is already reflected in a stock trading at just 0.14x its book value per share ex. AOCI as of YE15. Moreover, GNW's more than $1bn in estimated liquidity – liquidity of $1.374bn as of YE15, net of the $321mm it used to retire an issue of senior notes last month – helps to preserve optionality as the company proceeds with its efforts to unlock value, in our view.
For an analyst ratings summary and ratings history on Genworth Financial click here. For more ratings news on Genworth Financial click here.
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