Tom Mackinnon, an analyst from BMO Capital, maintained the Hold rating on Definity Financial Corp. (DFY – Research Report). The associated price target is C$63.00.
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Tom Mackinnon has given his Hold rating due to a combination of factors, primarily centered around the current valuation of Definity Financial Corp. Despite a modest Q4/24 earnings beat and steady fundamentals, the stock’s valuation seems to already reflect its projected 11% operating ROE for 2025. The target price was increased to $63, largely driven by the potential deployment of excess financial capacity and the possibility of a takeover after the moratorium ends in November 2025.
However, Mackinnon notes that while the company is set for top-line growth and improvements in underwriting profitability, the valuation at 2.1 times the book value appears to be pricing in most of these potential gains. Additionally, while certain areas such as personal property have performed better than expected, other segments like personal auto and distribution income have shown weaknesses, contributing to the conservative Hold stance.
Mackinnon covers the Financial sector, focusing on stocks such as IGM Financial, Sun Life Financial, and Fairfax Financial Holdings. According to TipRanks, Mackinnon has an average return of 16.7% and a 72.43% success rate on recommended stocks.