Manulife Financial (MFC) AI Stock Analysis

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Manulife Financial

(NYSE:MFC)

Rating:78Outperform

Price Target:

C$51.00

▲(14.81%Upside)

Manulife Financial's strong financial performance, highlighted by robust profitability, solid cash flow, and a well-managed balance sheet, supports its stock rating. Positive technical indicators further enhance its outlook, despite a moderate valuation. The earnings call underscores strategic growth and resilience, though some regional challenges and economic headwinds remain.

Positive Factors

Earnings Growth

4Q24 value of new business (VNB) rose 31% year-over-year, surpassing expected growth, with strong performance across Asia.

Financial Performance

Revised earnings and VNB growth forecasts result in a raised target price for Manulife, reflecting better-than-expected business momentum.

Shareholder Returns

A 10% increase in quarterly dividend and a refreshed share buyback program aim to reward shareholders.

Negative Factors

Macroeconomic Challenges

Manulife's diversified portfolio is well positioned to navigate macroeconomic challenges, including heightened US-China tensions.

Manulife Financial (MFC) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$75.07B

Dividend Yield3.74%

Average Volume (3M)10.51M

Price to Earnings (P/E)16.5

Beta (1Y)1.28

Revenue Growth5.24%

EPS Growth13.68%

CountryCA

Employees37,000

SectorFinancial

Sector Strength82

IndustryInsurance - Life

Share Statistics

EPS (TTM)0.99

Shares Outstanding1,712,710,800

10 Day Avg. Volume10,134,040

30 Day Avg. Volume10,507,842

Financial Highlights & Ratios

PEG Ratio-2.09

Price to Book (P/B)1.49

Price to Sales (P/S)0.00

P/FCF Ratio2.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$49.65

Price Target Upside11.77% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Manulife Financial Business Overview & Revenue Model

Company DescriptionManulife Financial Corporation, together with its subsidiaries, provides financial products and services in Asia, Canada, the United States, and internationally. The company operates through Wealth and Asset Management Businesses; Insurance and Annuity Products; And Corporate and Other segments. The Wealth and Asset Management Businesses segment provides mutual funds and exchange-traded funds, group retirement and savings products, and institutional asset management services through agents and brokers affiliated with the company, securities brokerage firms, and financial advisors pension plan consultants and banks. The Insurance and Annuity Products segment offers deposit and credit products; individual life, and individual and group long-term care insurance; and guaranteed and partially guaranteed annuity products through insurance agents, brokers, banks, financial planners, and direct marketing. The Corporate and Other segment is involved in property and casualty insurance and reinsurance businesses; and run-off reinsurance operations, including variable annuities, and accident and health. It also manages timberland and agricultural portfolios; and engages in insurance agency, portfolio and mutual fund management, mutual fund dealer, life, annuity, long-term care, and financial reinsurance; and fund management businesses. Additionally, the company holds and manages provides investment management, counseling, advisory, and dealer services. Manulife Financial Corporation was incorporated in 1887 and is headquartered in Toronto, Canada.

How the Company Makes MoneyManulife Financial makes money through a combination of insurance premiums, investment income, and fees from its wealth and asset management services. The company generates revenue from the sale of life and health insurance products, which provide policyholders with financial protection in exchange for regular premium payments. Additionally, Manulife earns investment income by managing a substantial portfolio of assets, including equities, bonds, and real estate, and leveraging its expertise in asset management to generate returns. The company also collects fees from managing mutual funds, pension plans, and other investment products through its wealth and asset management division. Key partnerships with financial institutions and distribution networks further enhance its ability to reach a broad customer base, contributing to its revenue streams.

Manulife Financial Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 3.31%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong performance in Asia and Global WAM, with robust capital returns to shareholders. However, challenges such as the P&C reinsurance charge, higher ECL provisions, and negative ALDA experience indicate some headwinds. Despite these challenges, the overall performance and strategic positioning of Manulife were portrayed positively.

Q1-2025 Updates

Positive Updates

Strong Growth in Asia AP Sales

Asia AP sales increased 50%, reflecting strong customer demand and continued execution in the region.

Positive Net Flows in Global WAM

Global WAM generated positive net flows of $500 million despite market volatility, demonstrating resilience.

Core EPS Increase

Core EPS increased 3%, driven by momentum in Asia and Global WAM businesses and share buybacks.

Improved Balance Sheet and Capital Metrics

A strong LICAT ratio of 137% and leverage ratio of 23.9% indicate robust balance sheet management.

Record Growth in New Business Metrics

New business CSM and new business value grew by 31% and 36% respectively, driven by 37% growth in AP sales.

Core Earnings Growth in Global WAM

Global WAM achieved over 20% growth in pre-tax core earnings for the sixth consecutive quarter.

Strong Performance in Asia Segment

Asia segment recorded a 50% increase in AP sales and 7% growth in core earnings year-on-year.

Shareholder Returns

Returned over $1.2 billion of capital to shareholders through dividends and share buybacks during the quarter.

Negative Updates

P&C Reinsurance Charge

A $35 million pre-tax charge related to California wildfires affected P&C reinsurance results.

Higher Expected Credit Loss (ECL) Provision

A $46 million pre-tax ECL charge was driven by updates to reflect the deteriorating economic environment.

Non-core Charge from Realized Losses

A non-core charge of $781 million from realized losses, mostly from fixed income asset disposals.

Negative ALDA Experience

A $275 million charge in the ALDA portfolio due to lower than expected returns on commercial real estate and private equity.

Declining U.S. Segment Earnings

Core earnings in the U.S. decreased 25% from a year earlier due to unfavorable net claims experience and lower investment spreads.

Company Guidance

During the Manulife Financial first quarter 2025 earnings call, significant metrics were highlighted by CEO Roy Gori and CFO Colin Simpson. Asia Annual Premium (AP) sales soared by 50%, showcasing robust customer demand and strategic execution in the region. Core Earnings Per Share (EPS) rose by 3%, attributed to strong performance in Asia and Global Wealth and Asset Management (WAM) sectors, alongside share buybacks. Noteworthy was the charge in the Property and Casualty (P&C) reinsurance segment due to California wildfires, and an increased Expected Credit Loss (ECL) provision reflecting market conditions. After adjusting for these items, core EPS would have risen by 9%. The company's LICAT ratio stood at a strong 137%, and the leverage ratio was at 23.9%, underscoring a robust balance sheet. Global WAM achieved positive net flows of $500 million despite market volatility. New business metrics were impressive, with AP sales up 37% year-on-year, driven by 50% growth in Asia, contributing to a 36% increase in new business value and a 31% rise in new business Contractual Service Margin (CSM). The company returned over $1.2 billion to shareholders through dividends and share buybacks during the quarter, maintaining a strong capital position to weather macroeconomic uncertainties.

Manulife Financial Financial Statement Overview

Summary

Manulife Financial demonstrates robust financial health across income, balance sheet, and cash flow metrics. While revenue growth is moderate, profitability and cash generation remain strong, supported by a solid balance sheet structure. This positions the company well within the life insurance industry.

Income Statement

Positive

Manulife Financial shows strong profitability with a gross profit margin of 52.53% and a net profit margin of 10.04% in TTM (Trailing-Twelve-Months), indicating efficient cost management. However, revenue growth has been relatively stagnant with a slight decline from the previous year. The EBIT margin remains robust at 37.08%, reflecting operational efficiency.

Balance Sheet

Very Positive

The balance sheet is stable with a debt-to-equity ratio of 0.27, suggesting prudent leverage management. The equity ratio of 5.28% indicates a conservative structure suitable for the insurance industry. Return on equity stands at 10.18%, showcasing effective shareholder value creation.

Cash Flow

Very Positive

The cash flow statement highlights strong cash generation with a positive operating cash flow to net income ratio of 5.43 in TTM, signifying efficient cash operations. Free cash flow has grown significantly by 7.99% from the previous year, indicating robust financial health.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
52.49B	53.29B	50.33B	15.28B	59.84B	77.12B
	Gross Profit
27.56B	28.85B	36.44B	15.28B	59.84B	77.12B
	EBIT
19.46B	20.83B	9.45B	10.10B	5.44B	3.65B
	EBITDA
11.73B	12.31B	8.59B	-1.57B	9.66B	8.61B
	Net Income Common Stockholders
5.27B	5.63B	5.46B	-2.10B	6.66B	5.33B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
25.36B	25.79B	20.34B	19.15B	22.59B	26.17B
	Total Assets
981.42B	978.82B	875.57B	848.94B	917.64B	880.35B
	Total Debt
14.18B	14.16B	12.74B	12.36B	11.86B	13.99B
	Net Debt
-11.19B	-11.63B	-1.44B	-6.80B	-10.73B	-12.17B
	Total Liabilities
928.25B	925.86B	826.85B	792.56B	14.63B	16.61B
	Stockholders Equity
51.77B	51.54B	47.30B	54.72B	57.17B	51.55B
Cash Flow		Free Cash Flow
28.61B	26.49B	20.42B	16.63B	23.16B	20.05B
	Operating Cash Flow
28.61B	26.49B	20.42B	16.63B	23.16B	20.05B
	Investing Cash Flow
-21.47B	-18.46B	-13.72B	-18.40B	-24.44B	-14.15B
	Financing Cash Flow
-4.84B	-4.17B	-5.04B	-2.11B	-2.05B	663.00M

Manulife Financial Technical Analysis

Technical Analysis Sentiment

Positive

Last Price44.42

Price Trends

50DMA

42.29

Positive

100DMA

42.41

Positive

200DMA

41.60

Positive

Market Momentum

MACD

0.45

Positive

RSI

61.80

Neutral

STOCH

80.44

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MFC, the sentiment is Positive. The current price of 44.42 is above the 20-day moving average (MA) of 43.63, above the 50-day MA of 42.29, and above the 200-day MA of 41.60, indicating a bullish trend. The MACD of 0.45 indicates Positive momentum. The RSI at 61.80 is Neutral, neither overbought nor oversold. The STOCH value of 80.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MFC.

Manulife Financial Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MFC	78 Outperform	C$75.07B	16.48	10.17%	3.74%	5.24%	13.68%
Sector *	64 Neutral	$12.77B	9.77	7.59%	16985.66%	12.30%	-7.71%
SLF		$36.78B	16.52	13.18%	3.69%	―	―
FRFHF		$40.78B	9.11	17.21%	0.92%	―	―
IAG	77 Outperform	C$13.04B	14.80	12.54%	2.51%	-7.31%	28.65%
IFC	76 Outperform	C$56.14B	25.40	12.95%	1.57%	4.73%	44.14%
GWO	68 Neutral	C$47.63B	12.36	14.65%	4.46%	17.48%	25.54%

* Financial Sector Average

Performance Comparison

TSE:MFC

Manulife Financial

44.42

9.75

28.11%

SLF

Sun Life Financial

65.29

17.85

37.63%

FRFHF

Fairfax Financial Holdings

1,662.87

548.69

49.25%

TSE:GWO

Great-West Lifeco

51.34

12.70

32.87%

TSE:IAG

iA Financial Corporation Inc

142.32

56.74

66.30%

TSE:IFC

Intact Financial Corporation

311.94

86.35

38.28%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.