Research Alert: CFRA Maintains Hold Rating On Shares Of Great-west Lifeco Inc.
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We maintain our 3-STARS (Hold) rating on GWO and increase our target price to CAD81 from CAD70. The quarter saw strong execution across all business lines, only to be tempered by our concerns over a red hot equity market and valuation. Base earnings of CAD1,239M was up 20% Y/Y and base EPS of CAD1.37 was up 23%. ROE reached +19% for the first time as Empower operating margins ran to 33.5% (+320 basis points) and 39% (+850 basis points) in Retirement and Wealth. The strong quarter saw share buybacks continuing with CAD578M used for repurchases in Q1. Valuation, however, is stretched. On both a historical and absolute basis, the forward earnings multiple is exceeding the long-term upper bands as equity markets run red hot into a continuing energy crisis. We believe the downside risk is elevated as AUM growth, fee income, and the Empower margins are correlated with equity market performance. We raised our 2026 EPS estimate to CAD5.47 from CAD5.39 and 2027's to CAD6.01 from CAD5.82.
