On Aug 31, 2016, Zacks Investment Research downgraded Manulife Financial Corporation (MFC - Free Report) to a Zacks Rank #4 (Sell).
Why the Downgrade?
Manulife Financial has been witnessing downward estimate revisions after reporting disappointing second-quarter 2016 results. With respect to the surprise trend, the company delivered negative surprises in two of the last four quarters, with an average miss of 2.83%.
The life insurer’s second-quarter core earnings of $643.5 million (C$833 million) declined from the prior-year quarter, primarily due to the absence of core investment gains, higher-than-expected macro hedging costs and lower earnings on surplus assets. Also, the life insurer experienced lower sales at its U.S. and Canada divisions in the second quarter.
Manulife’s soft results from the U.S. division and low interest rates continue to hurt the overall performance. Core earnings at the U.S. division plunged 11% year over year, owing to an unfavorable policyholder experience in JH Long Term Care, the non-recurrence of favorable policy-related items from the year-ago quarter and lower new business gains in Insurance. Given the stiff competition and a continued low interest rate environment, earnings from this division are expected to remain under pressure in the near term.
Also, recent volatile global equity markets and low bond yields have been adversely affecting the company’s capital position.
The Zacks Consensus Estimate for 2016 moved down 3.5% to $1.36 per share over the last 30 days. For 2017, the same moved down 1.9% to $1.57 per share over the same time frame.
Zacks Rank and Stocks to Consider
Though we prefer to avoid Manulife Financial presently, some better-ranked stocks from the life insurance industry are Health Insurance Innovations, Inc. , Genworth Financial, Inc. (GNW - Free Report) and Primerica, Inc. (PRI - Free Report) . While Health Insurance Innovation sports a Zacks Rank #1 (Strong Buy), both Genworth Financial and Primerica hold a Zacks Rank #2 (Buy).
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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On Aug 31, 2016, Zacks Investment Research downgraded Manulife Financial Corporation (MFC - Free Report) to a Zacks Rank #4 (Sell).
Why the Downgrade?
Manulife Financial has been witnessing downward estimate revisions after reporting disappointing second-quarter 2016 results. With respect to the surprise trend, the company delivered negative surprises in two of the last four quarters, with an average miss of 2.83%.
The life insurer’s second-quarter core earnings of $643.5 million (C$833 million) declined from the prior-year quarter, primarily due to the absence of core investment gains, higher-than-expected macro hedging costs and lower earnings on surplus assets. Also, the life insurer experienced lower sales at its U.S. and Canada divisions in the second quarter.
Manulife’s soft results from the U.S. division and low interest rates continue to hurt the overall performance. Core earnings at the U.S. division plunged 11% year over year, owing to an unfavorable policyholder experience in JH Long Term Care, the non-recurrence of favorable policy-related items from the year-ago quarter and lower new business gains in Insurance. Given the stiff competition and a continued low interest rate environment, earnings from this division are expected to remain under pressure in the near term.
Also, recent volatile global equity markets and low bond yields have been adversely affecting the company’s capital position.
The Zacks Consensus Estimate for 2016 moved down 3.5% to $1.36 per share over the last 30 days. For 2017, the same moved down 1.9% to $1.57 per share over the same time frame.
Zacks Rank and Stocks to Consider
Though we prefer to avoid Manulife Financial presently, some better-ranked stocks from the life insurance industry are Health Insurance Innovations, Inc. , Genworth Financial, Inc. (GNW - Free Report) and Primerica, Inc. (PRI - Free Report) . While Health Insurance Innovation sports a Zacks Rank #1 (Strong Buy), both Genworth Financial and Primerica hold a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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