UPDATE: Evercore ISI Upgrades American Equity Investment Life Holding (AEL) to Outperform

January 5, 2022 4:36 AM EST
Get Alerts AEL Hot Sheet
Price: $38.77 +0.60%

Rating Summary:
    7 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 7 | Down: 9 | New: 42
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(Updated - January 5, 2022 4:40 AM EST)

Evercore ISI analyst Thomas Gallagher upgraded American Equity Investment Life Holding (NYSE: AEL) from In Line to Outperform with a price target of $46.00 (from $34.00).

The analyst comments "We upgrade AEL to outperform from in-line with a $46 price target, representing 14% upside to the shares. We see a glide path to a more robust valuation as the company executes on its AEL 2.0 initiative, in which it transitions from a traditional spread-based annuity writer to an insurer that derives a greater portion of its earnings from capital light fee-based businesses, similar to an insurance broker. We estimate ~8% of AEL’s earnings will come from fee-based business in 2023 from the Brookfield in-force and flow reinsurance agreements alone, and we see potential for AEL to increase this proportion closer to 15- 20% through additional in-force deals and/or flow reinsurance treaties, and we believe the ramp-up of its offshore reinsurance entity will also accelerate growth of its fee-based earnings stream while improving FCF conversion over time."

For an analyst ratings summary and ratings history on American Equity Investment Life Holding click here. For more ratings news on American Equity Investment Life Holding click here.

Shares of American Equity Investment Life Holding closed at $40.51 yesterday.


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