High Return On Equity Calls For A Higher Valuation On American Equity
Fri, Jul. 8, 1:00 PM
Mon, Jun. 6, 1:00 PM
Wed, Apr. 6, 12:46 PM
Feb. 21, 2014, 7:18 AM
- After a 20% decline YTD, lower sales expectations and convertible tender dilution issues are baked into the stock, says FBR, upgrading American Equity Investment Life (AEL) to Outperform with $25 price target.
- Analyst Randy Binner notes valuation - which peaked earlier this year at 11.5x 2015 EPS estimates and 1.4x book value - is back to 8.2x EPS and 1.1x book.
- "We remain bullish on growth prospects for the indexed annuity product, which is AEL's specialty, as it still comprises only 15% of industry annuity sales. AEL's entrance into the broker/dealer channel for the first time could materially augment sales this year and serve as a new sales contributor as indexed annuity distribution evolves."
- Shares rose 4.2% yesterday amid the upgrade
American Equity Investment Life Holding Co. engages in the provision, development, and sale of annuity products. Its portfolio includes fixed annuity, life insurance, and health insurance. The company was founded by David J. Noble on December 15, 1995 and is headquartered in West Des Moines, IA.
Industry: Life Insurance
Country: United States
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