Desjardins: Sun Life Financial Currently a Buying Opportunity

The recent dip for Sun Life Financial Inc. (SLF) shares presents a buying opportunity, according to Desjardins Securities analyst Michael Goldberg, since the negative reaction to the company’s May 1 first quarter results is due to a temporary issue.

Costs related to Sun Life’s LP3 universal life product, which was launched last year, were particularly bad in the most recent quarter because of strong sales, Mr. Goldberg said in a note to clients.

“Investors have not understood that this high cost is temporary – not only will it come down later this year, but part of the extra strain on past sales will come back into earnings,” he added.

Mr. Goldberg reiterated his “buy” rating and C$58.50 price target on Sun Life shares, representing upside of roughly 13%.