Sun Life Financial (SLF) AI Stock Analysis

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Sun Life Financial

(TSX:SLF)

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Outperform 73 (OpenAI - 4o)

Rating:73Outperform

Price Target:

C$90.00

▲(10.67% Upside)

Sun Life Financial's overall score reflects strong financial performance and strategic growth initiatives, particularly in Asia and digital advancements. However, declining cash flows and challenges in the U.S. Dental business and MFS outflows present risks. The stock's valuation is reasonable, with an attractive dividend yield, but technical indicators suggest limited upward momentum.

Positive Factors

Negative Factors

Sun Life Financial (SLF) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$45.73B

Dividend Yield4.2%

Average Volume (3M)2.39M

Price to Earnings (P/E)14.4

Beta (1Y)0.81

Revenue Growth-0.61%

EPS Growth6.69%

CountryCA

Employees31,768

SectorFinancial

Sector Strength70

IndustryInsurance - Diversified

Share Statistics

EPS (TTM)1.79

Shares Outstanding562,314,500

10 Day Avg. Volume2,138,384

30 Day Avg. Volume2,388,906

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.33

Enterprise Value/Revenue1.30

Enterprise Value/Gross Profit2.10

Enterprise Value/Ebitda11.96

Forecast

1Y Price Target

$88.27

Price Target Upside8.54% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Sun Life Financial Business Overview & Revenue Model

Company DescriptionSun Life Financial Inc., a financial services company, provides insurance, wealth, and asset management solutions to individuals and corporate clients worldwide. It offers term and permanent life, as well as personal health, dental, critical illness, long-term care, and disability insurance products. The company also provides reinsurance products; investment counselling and portfolio management services; mutual funds and segregated funds; trust and banking services; real estate property brokerage and appraisal services; and merchant banking services. It distributes its products through direct sales agents, managing and independent general agents, financial intermediaries, broker-dealers, banks, pension and benefits consultants, and other third-party marketing organizations. The company was founded in 1871 and is headquartered in Toronto, Canada.

How the Company Makes MoneySun Life Financial generates revenue through multiple streams, primarily from premiums collected on life and health insurance policies, as well as from fees charged for asset management services. The company earns significant income from its insurance operations, where it underwrites policies and invests the collected premiums until claims are made. Additionally, Sun Life earns management fees from the investment products it offers, such as mutual funds and retirement plans, which are charged as a percentage of assets under management. The firm also benefits from strategic partnerships with financial advisors and brokers, which help distribute its products to a wider audience. Furthermore, investment income derived from its large portfolio of assets plays a crucial role in its overall profitability, contributing to both its insurance and asset management segments.

Sun Life Financial Earnings Call Summary

Earnings Call Date:Aug 07, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 05, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive financial results and strategic advancements, such as strong EPS growth and digital initiatives, alongside challenges primarily in the U.S. Dental sector and outflows in MFS. The highlights of strong earnings and strategic successes are somewhat offset by the challenges in specific areas, resulting in a balanced sentiment.

Q2-2025 Updates

Positive Updates

Strong Financial Performance

Underlying EPS was $1.79, up 4% year-over-year. Underlying net income was just over $1 billion, with an underlying ROE of 17.6%.

U.S. Employee Benefits Record Earnings

The U.S. Employee Benefits business achieved record earnings this quarter, showcasing its leadership position in the market.

Asia Business Success

Asia recorded a 13% year-over-year increase in underlying net income. Individual Protection sales were up 22%, and the CSM grew 23% year-over-year.

Digital Advancements

Significant progress in digital leadership, including the deployment of generative AI capabilities and the launch of a reimagined mobile application in Canada.

Strong Capital Position

The LICAT ratio at SLF was 151%, and Sun Life bought back close to $400 million of shares.

Negative Updates

Challenges in U.S. Dental Business

The U.S. Dental business was impacted by higher Medicaid claims, higher usage by members, and slower repricing actions. There was also an impairment charge related to the early termination of a U.S. group Dental contract.

MFS Outflows

MFS experienced net outflows of USD 14.3 billion due to market uncertainty and institutional client rebalancing.

Lower Individual Protection Earnings in U.S.

U.S. Individual Protection underlying earnings were down 46% year-over-year, driven by unfavorable mortality experience and credit impairments.

Company Guidance

During Sun Life Financial's Q2 2025 conference call, the company provided several key performance metrics and updates. The underlying earnings per share (EPS) rose to $1.79, reflecting a 4% increase year-over-year, while underlying net income exceeded $1 billion. The underlying return on equity (ROE) was 17.6%. The company's LICAT ratio stood at 151%, and they repurchased nearly $400 million in shares. In terms of geographical performance, Asia, Canada, and SLC Management had strong quarters. The U.S. Employee Benefits business achieved record earnings, although the U.S. Dental business faced challenges due to the healthcare environment. Sun Life's asset management arm, MFS, experienced outflows but maintained strong total gross sales. The company's strategic imperatives in asset management, Asia, health, digital, and people showed positive momentum, with significant capital raising of $6 billion and growth in the wealth management sector. Additionally, the company's total contractual service margin (CSM) increased by 9% year-over-year to $13.7 billion. Leadership changes were also announced, including the upcoming retirement of Dan Fishbein, President of Sun Life U.S., and Kevin Morrissey, Chief Actuary, with David Healy set to take over as President of Sun Life U.S.

Sun Life Financial Financial Statement Overview

Summary

Sun Life Financial shows strong revenue growth and stable net income, but faces challenges with declining cash flows and a rising debt-to-equity ratio. The balance sheet remains robust, supporting financial health, though cash flow management needs improvement.

Income Statement

Positive

Sun Life Financial has demonstrated consistent revenue growth over the years, with a significant increase from $30.85 billion in 2023 to $36.80 billion in 2024. The net profit margin is stable, with net income remaining robust at approximately $3.17 billion. However, the absence of EBIT and EBITDA figures for 2024 limits the analysis of profitability efficiency.

Balance Sheet

Positive

The company's balance sheet reflects a solid equity position with a debt-to-equity ratio that remains manageable, although it increased slightly to 0.58 in 2024. Equity ratio stands at 7.03%, indicating a relatively low proportion of equity financing compared to total assets. Despite this, Sun Life Financial maintains a strong asset base, which supports its financial stability.

Cash Flow

Positive

The cash flow analysis shows a decline in operating cash flow from $5.61 billion in 2023 to $2.53 billion in 2024. The free cash flow decreased similarly, reflecting potential challenges in cash generation. The operating cash flow to net income ratio decreased, indicating less cash being generated from operations relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	46.63B	36.80B	30.85B	23.21B	35.69B	43.34B
Gross Profit	29.04B	36.80B	32.66B	23.21B	35.69B	43.34B
EBITDA	5.09B	5.00B	5.08B	4.79B	6.93B	4.07B
Net Income	3.29B	3.17B	3.17B	3.02B	4.37B	2.78B
Balance Sheet
Total Assets	376.29B	370.72B	333.24B	330.91B	345.37B	323.01B
Cash, Cash Equivalents and Short-Term Investments	25.40B	27.72B	27.49B	11.22B	12.28B	13.53B
Total Debt	6.38B	15.02B	13.28B	13.39B	10.21B	6.89B
Total Liabilities	351.10B	344.59B	309.04B	301.53B	317.30B	297.15B
Stockholders Equity	25.12B	26.05B	23.58B	27.45B	26.31B	24.47B
Cash Flow
Free Cash Flow	5.37B	2.39B	5.44B	8.00B	-1.94B	7.09B
Operating Cash Flow	5.51B	2.53B	5.61B	4.31B	-1.86B	7.25B
Investing Cash Flow	-1.72B	-337.00M	-559.00M	-2.86B	-803.00M	-886.00M
Financing Cash Flow	-5.08B	-3.88B	-3.09B	-71.00M	-260.00M	-2.31B

Sun Life Financial Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price81.32

Price Trends

50DMA

81.82

Negative

100DMA

83.80

Negative

200DMA

81.92

Negative

Market Momentum

MACD

0.02

Negative

RSI

51.12

Neutral

STOCH

67.14

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SLF, the sentiment is Neutral. The current price of 81.32 is above the 20-day moving average (MA) of 80.66, below the 50-day MA of 81.82, and below the 200-day MA of 81.92, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 51.12 is Neutral, neither overbought nor oversold. The STOCH value of 67.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:SLF.

Sun Life Financial Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IFC	77 Outperform	47.53B	20.42	12.58%	1.95%	5.25%	15.06%
MFC	76 Outperform	72.54B	13.69	12.14%	3.97%	9.37%	32.06%
IAG	75 Outperform	14.23B	14.24	12.86%	2.39%	-4.55%	42.41%
POW	73 Outperform	36.66B	13.41	11.54%	5.18%	11.56%	1.15%
SLF	73 Outperform	$45.73B	14.35	13.38%	4.20%	-0.61%	6.69%
GWO	72 Outperform	49.23B	13.30	13.06%	4.48%	15.27%	4.72%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

* Financial Sector Average

Performance Comparison

TSE:SLF

Sun Life Financial

82.00

8.34

11.32%

MFC

Manulife Financial

31.39

3.75

13.57%

TSE:GWO

Great-West Lifeco

53.20

9.42

21.52%

TSE:IAG

iA Financial Corporation Inc

154.71

48.02

45.01%

TSE:IFC

Intact Financial Corporation

267.24

16.64

6.64%

TSE:POW

Power Corp of Canada

57.88

17.30

42.63%

Sun Life Financial Corporate Events

Business Operations and StrategyPrivate Placements and Financing

Sun Life Financial to Issue $1 Billion in Debentures for Strategic Growth

Positive

Sep 10, 2025

Sun Life Financial Inc. announced its intention to issue $1 billion in Series 2025-1 Subordinated Unsecured 4.14% Fixed/Floating Debentures due 2037 in Canada. The proceeds from this offering will be used for general corporate purposes, including potential acquisitions and strategic investments, and are expected to qualify for Tier 2 capital. This move is part of Sun Life’s strategy to strengthen its financial position and support its growth initiatives, potentially impacting its market positioning and stakeholder interests.

The most recent analyst rating on (TSE:SLF) stock is a Buy with a C$65.00 price target. To see the full list of analyst forecasts on Sun Life Financial stock, see the TSE:SLF Stock Forecast page.

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.Date of analysis: Sep 18, 2025