Tom Mackinnon, an analyst from BMO Capital, maintained the Hold rating on Great-West Lifeco (GWO – Research Report). The associated price target is C$54.00.
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Tom Mackinnon has given his Hold rating due to a combination of factors. While there is a slight increase in base EPS estimates for 2025 and 2026, largely driven by a 1% share buyback, the overall earnings visibility for Great-West Lifeco poses certain challenges. The company’s recent quarterly performance was mixed, with some unexpected gains from non-recurring items, but also faced weaker earnings from its Empower segment and insurance operations.
Despite a notable 10% dividend increase and plans to enhance financial flexibility with increased holdco cash, the company’s leverage remains relatively high at an estimated 29%. Additionally, uncertainties in key segments such as Empower, Europe, and Capital & Risk Solutions, combined with a somewhat opaque earnings outlook, contribute to the cautious Hold stance. The deployment of excess capital, while potentially beneficial, does not sufficiently offset these concerns, leading to the current recommendation.
Mackinnon covers the Financial sector, focusing on stocks such as IGM Financial, Manulife Financial, and CI Financial. According to TipRanks, Mackinnon has an average return of 16.5% and a 71.76% 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.