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CIBC Reviews Canadian Lifecos' Q1, Says Results "a Little Disappointing", Updates Price Targets on Group

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The Canadian lifecos' first-quarter results were "a little disappointing", writes CIBC analyst Paul Holden, with Great-West Lifeco (GWO.TO) the only name to beat consensus EPS. Holden also updated his price targets on the shares of the group.

Three lifecos experienced significant negative reactions on the day of their results (Manulife, Sun Life and iA Financial). 2027 consensus EPS for the three stocks did not change that much (-0.3% on average), but multiples declined to reflect lower earnings visibility.

"While there were clear weaknesses in the results for each of these three names, the overall outcome was not as bad as it initially appeared. EPS was up 8% Y/Y on average and ROE was up 90bps. Buying on weakness is a good call," Holden adds.

He still recommends lifecos over banks, pointing out the expected insurance earnings increased by 9% Y/Y on average. Earnings are expected to benefit from the move in equity markets post quarter-end, while lifecos also tend to benefit from higher inflation and interest rates. P/E multiples also remain at a 15% discount to the banks.

Great-West and Manulife Financial (MFC.TO)are Holden's two outperformer names. Great-West does not have any meaningful challenges that need to be addressed and there is room for EPS upside, including from a potential acquisition. He has raised his price target on the shares by $6.00 to $81.00.

Asia is producing exceptional growth for Manulife, and GWAM earnings are also expected to see a big rebound in the second quarter along with U.S. insurance experience, which is off to a good start in 2026. ROE is on track for 18% in 2027, implying ~5% upside to consensus EPS, Holden calculates. Manulife is also trading at the biggest discount in the group (9%). "We believe this is the stock to buy between quarters." Manulife price target has also been raised to $61.00 from $58.00.

CIBC is maintaining a neutral rating on both Sun Life (SLF.TO) and iA Financial (IAG.TO). The price target on the shares of Sun Life has been raised by $7.00 to $102.00, while iA Financial share price target has been lowered to $180.00 from $184.00.

Price: $78.76, Change: $+0.61, Percent Change: +0.78%

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