Analyst Tom Mackinnon of BMO Capital maintained a Hold rating on Great-West Lifeco (GWO – Research Report), boosting the price target to C$59.00.
Tom Mackinnon’s rating is based on a combination of factors that reflect both the strengths and challenges facing Great-West Lifeco. The company has set ambitious targets, such as increasing its return on equity to over 19% and maintaining an 8-10% growth in earnings per share. These goals align with industry trends and demonstrate a commitment to growth. However, these targets were largely anticipated by the market, and the current stock valuation already reflects these expectations.
Despite the positive outlook, there are concerns regarding the visibility of earnings, particularly in the European and Capital & Risk Solutions segments, which can be unpredictable. Additionally, while the company’s dividend yield of 4.2% offers some support, the valuation at 11.8 times the next twelve months’ base earnings per share appears to be fully priced. The potential for growth through Empower, a key driver, is promising but remains uncertain, leading to a cautious Hold rating.
Mackinnon covers the Financial sector, focusing on stocks such as Fairfax Financial Holdings, IGM Financial, and Manulife Financial. According to TipRanks, Mackinnon has an average return of 16.9% and a 73.38% success rate on recommended stocks.
In another report released yesterday, RBC Capital also maintained a Hold rating on the stock with a C$53.00 price target.