Great-West Lifeco (TSE:GWO)
TSX:GWO
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Great-West Lifeco
(TSX:GWO)
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Rating:65Neutral
Price Target:
C$66.00
â–¼(-2.31% Downside)
Action:DowngradedDate:02/18/26
The score is driven primarily by mixed financial performance—stable earnings and capitalization but weaker 2025 cash conversion and operating-result volatility. Valuation and the earnings call are supportive (reasonable P/E, strong dividend, constructive guidance and capital returns), while technicals are a meaningful near-term drag due to bearish momentum and the stock trading below key moving averages.
Positive Factors
Scale & market position
Empower's >$2.0tn in client assets and Lifeco's $3.3tn total assets provide durable scale across retirement and wealth channels. Scale strengthens distribution economics, fee revenue stability, product cross-sell, and bargaining power with asset managers, supporting steady long-term earnings.
Negative Factors
Weak 2025 cash conversion
A sharp drop in operating cash flow and materially weaker free cash flow in 2025 reduced cash coverage of earnings (~0.29x). Persistent or recurring weaker cash conversion would limit capital return capacity and increase earnings volatility given lifecycle timing of insurance cash flows and investment spreads.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & market position
Empower's >$2.0tn in client assets and Lifeco's $3.3tn total assets provide durable scale across retirement and wealth channels. Scale strengthens distribution economics, fee revenue stability, product cross-sell, and bargaining power with asset managers, supporting steady long-term earnings.
Read all positive factors
Great-West Lifeco (GWO) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$61.07B
Dividend Yield3.62%
Average Volume (3M)1.36M
Price to Earnings (P/E)14.1
Beta (1Y)0.34
Revenue Growth-20.64%
EPS Growth14.88%
CountryCA
Employees33,250
SectorFinancial
Sector Strength70
IndustryInsurance - Life
Share Statistics
EPS (TTM)1.36
Shares Outstanding903,947,900
10 Day Avg. Volume1,022,622
30 Day Avg. Volume1,362,098
Financial Highlights & Ratios
PEG Ratio10.70
Price to Book (P/B)2.09
Price to Sales (P/S)1.60
P/FCF Ratio23.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$73.79Price Target Upside9.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)5.48
Revenue Forecast (FY)C$5.08B
Great-West Lifeco Business Overview & Revenue Model
Company Description
Great-West Lifeco Inc., a financial services holding company, engages in the life and health insurance, retirement and investment services, asset management, and reinsurance businesses in Canada, the United States, and Europe. The company offers a...
How the Company Makes Money
Great-West Lifeco generates revenue through several key streams, primarily from premiums collected on insurance products, fees from asset management services, and investment income. The company offers various life and health insurance policies, wh...
Great-West Lifeco Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: record base earnings and EPS growth, robust capital generation and free cash flow, significant progress at Empower (scale and margins), active capital returns (buybacks and a 10% dividend hike), and growth across key businesses (Capital Solutions, Canada, Europe adjusted). Offsetting items included quarter-to-quarter volatility in Europe (mortality and trading), lower earnings on surplus driven by falling yields and intercompany dividends, some market-driven pressures in P&C retrocession and participant outflows affecting fee mix. On balance the positives (broad-based growth, cash generation, strong shareholder returns, and scalable AI/technology initiatives) materially outweigh the transient and manageable headwinds.Positive Updates
Record Base Earnings and EPS Growth
Delivered record base earnings for the year and third consecutive quarter; base earnings up 11% year-over-year and base earnings per share up 12% year-over-year, driving base ROE to 18.2% (up ~70 basis points).
Negative Updates
Q4 European Headwinds and Volatility
Fourth-quarter Europe base earnings declined 2% year-over-year due to unfavorable mortality experience and significantly lower trading gains; earnings on surplus in Europe reduced due to nearly $2 billion of dividends remitted to Great-West over 24 months exceeding the business's earnings, creating quarter-to-quarter volatility.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Base Earnings and EPS Growth
Delivered record base earnings for the year and third consecutive quarter; base earnings up 11% year-over-year and base earnings per share up 12% year-over-year, driving base ROE to 18.2% (up ~70 basis points).
Read all positive updates
Company Guidance
Management's guidance stressed continued strong capital generation and disciplined returns: they expect Empower to deliver double‑digit base earnings growth in 2026 and Lifeco to reach >19% base ROE over the medium term (2025 base ROE was 18.2% with the U.S. >20%), and to generate 70%+ of base earnings from capital‑light businesses. On capital and liquidity, base capital generation exceeded 80% of base earnings and free cash flow was ~90% of base earnings in 2025; LICAT was 128% (down from 131%) and is expected to remain above 125% in 2026, leverage was 28% (up 1 ppt), and holding‑company cash was ~$2.1bn (deployable cash >$2bn). They reaffirmed a high return‑of‑capital posture—28m shares repurchased for >$1.6bn in 2025, $250m repurchased YTD 2026, an NCIB for up to 20m shares, and a 10% quarterly dividend increase to $0.60—noting they would likely return an amount similar to 2025 absent compelling M&A. Other quantified expectations included an effective tax rate rising from <16% in 2025 (a ~$0.10/sh tax benefit included) toward ~18% by 2028, credit losses of 4–6 bps of fixed income (≈$70–100m post‑tax in 2026), and continued business momentum (Empower >$2.0tn AUA, total client assets $3.3tn with >$1.0tn higher‑margin AUM/advisory; Empower Wealth net new assets +14% with USD 3.4bn rollovers; CRS run‑rate insurance result +46% YoY in Q4 and +29% FY).Great-West Lifeco Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
74
Positive
Cash Flow
58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 39.10B | 34.72B | 36.73B | -2.69B | 64.45B |
| Gross Profit | 13.13B | 13.39B | 11.12B | 11.06B | 12.93B |
| EBITDA | 5.64B | 5.93B | 3.98B | 4.96B | 4.72B |
| Net Income | 4.12B | 4.07B | 2.87B | 3.73B | 3.26B |
Balance Sheet | |||||
| Total Assets | 862.83B | 802.16B | 713.23B | 701.46B | 630.49B |
| Cash, Cash Equivalents and Short-Term Investments | 28.39B | 24.71B | 19.38B | 18.84B | 17.23B |
| Total Debt | 13.41B | 10.23B | 9.65B | 11.29B | 9.73B |
| Total Liabilities | 829.83B | 771.01B | 683.38B | 669.14B | 600.00B |
| Stockholders Equity | 29.86B | 29.54B | 26.84B | 29.01B | 27.22B |
Cash Flow | |||||
| Free Cash Flow | 2.71B | 4.75B | 5.20B | 7.05B | 10.37B |
| Operating Cash Flow | 2.71B | 4.75B | 5.20B | 7.05B | 10.37B |
| Investing Cash Flow | -56.00M | -408.00M | -786.00M | -5.49B | -11.21B |
| Financing Cash Flow | -4.32B | -2.29B | -3.55B | -620.00M | -992.00M |
Great-West Lifeco Technical Analysis
Positive
67.56
Price Trends
63.36
Positive
64.06
Positive
58.84
Positive
Market Momentum
0.92
Negative
70.29
Negative
89.60
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GWO, the sentiment is Positive. The current price of 67.56 is above the 20-day moving average (MA) of 64.53, above the 50-day MA of 63.36, and above the 200-day MA of 58.84, indicating a bullish trend. The MACD of 0.92 indicates Negative momentum. The RSI at 70.29 is Negative, neither overbought nor oversold. The STOCH value of 89.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:GWO.
Great-West Lifeco Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$44.89B | 15.12 | 16.27% | 1.86% | 2.51% | 44.44% | |
72 Outperform | C$84.81B | 14.68 | 11.34% | 3.49% | 5.46% | 10.52% | |
72 Outperform | C$50.57B | 12.88 | 14.68% | 4.11% | -19.88% | -13.92% | |
72 Outperform | C$51.65B | 8.56 | 18.62% | 0.84% | 10.08% | 24.18% | |
70 Outperform | C$43.94B | 17.80 | 12.83% | 3.28% | -9.03% | 44.14% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | C$61.07B | 14.06 | 13.98% | 3.62% | -20.64% | 14.88% |
* Financial Sector Average
TSE:GWO
Great-West Lifeco
67.56
18.19
36.85%
TSE:MFC
Manulife Financial
50.58
13.87
37.79%
TSE:SLF
Sun Life Financial
91.31
18.51
25.43%
TSE:FFH
Fairfax Financial Holdings
2,408.28
487.23
25.36%
TSE:IFC
Intact Financial Corporation
252.80
-19.22
-7.07%
TSE:POW
Power Corp of Canada
69.64
22.77
48.59%
Great-West Lifeco Corporate Events
Business Operations and StrategyFinancial Disclosures
Great-West Lifeco CEO to Discuss Strategy and 2025 Results in TD Cowen Virtual Fireside Chat
Neutral
Feb 17, 2026
Great-West Lifeco Inc. said President and Chief Executive Officer David Harney will participate in a virtual fireside chat hosted by TD Cowen analyst Mario Mendonca on February 19, 2026, to discuss the company’s strategy and 2025 financial r...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Great-West Lifeco Posts Record 2025 Base Earnings and Hikes Dividend 10%
Positive
Feb 12, 2026
Great-West Lifeco reported record base earnings for 2025, with fourth-quarter base earnings rising 12% to $1.25 billion, or $1.36 per share, driven by higher assets from market growth, strong performance in its Retirement and Wealth segments, part...
Business Operations and Strategy
Canada Life Wins 38 FundGrade A+ Awards for Mutual and Segregated Funds
Positive
Feb 6, 2026
Canada Life and Canada Life Investment Management Ltd. secured 38 FundGrade A+ Awards from Fundata for 2025, with four mutual funds and 34 segregated funds recognized for consistent, outstanding, risk-adjusted performance. The accolades, spanning ...
Financial Disclosures
Great-West Lifeco Sets February Dates for Q4 2025 Results and Earnings Call
Neutral
Jan 21, 2026
Great-West Lifeco Inc. will release its fourth-quarter 2025 financial results after markets close on February 11, 2026, followed by an earnings conference call and webcast with company management on the morning of February 12. The scheduled disclo...
Business Operations and StrategyDelistings and Listing Changes
Great-West Lifeco Announces Conversion Results for Series N Preferred Shares
Neutral
Dec 17, 2025
Great-West Lifeco Inc. announced the result of a conversion election for its Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series N. Holders of 6,425 Series N Shares opted to convert their shares into Series O Shares on a one-for-one ba...
Dividends
Great-West Lifeco Sets Dividend Rates for Preferred Shares
Positive
Dec 2, 2025
Great-West Lifeco Inc. announced the dividend rates for its Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series N, and Non-Cumulative Floating Rate First Preferred Shares, Series O. The fixed dividend rate for Series N Shares is set at...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.