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Analysts initiated coverage of Corebridge Financial Inc (NYSE:CRBG) on Monday, with several assigning bullish ratings to the stock.
Wells Fargo initiated Corebridge with an Overweight rating and a $23 price target. Analysts told investors in a note that the firm’s 2022, 2023, and 2024 EPS estimates are $2.69, $3.65, and $4.75, respectively, while its SOTP-based price target is $23, representing 20% upside potential, including dividend yield.
“CRBG is the Life & Retirement (L&R) business of AIG (NYSE:AIG), which IPO’d at $21 per share on 9/14/22. CRBG is a ROE improvement and capital return story as the company is targeting improving ROE ~300bps and returning 60-65% of adjusted earnings each year, in line with PRU and ahead of EQH and LNC,” said the analysts. Further, unlike other IPOs, the company will return capital immediately via dividend and will start buying back shares in Q2 2023.”
Piper Sandler initiated shares of Corebridge with an Overweight rating and a $25 price target. Analysts there said the firm like’s the stock because it is an established and at-scale leader in 3 of its 4 businesses, the company lacks legacy liabilities, its earnings profile is levered more to rising interest rates than exposed to impact from equity market volatility, there is a good line of sight towards an improving ROE profile and the valuation is attractive.
Jefferies started Corebridge at Buy with a $25 price target. Analysts stated that Corebridge’s 33%/43% discounts to its peer median on 2023/24 P/E are “at odds with its EPS growth and don’t fully reflect its lower risk liability profile.”
However, they believe a re-rating may take time and is macro-dependent, while it also has a 4-5% dividend yield. “While future AIG sales are an overhang, EQH and VOYA generally outperformed around their secondaries,” wrote the analysts.
Finally, Oppenheimer initiated shares of Corebridge with an Outperform rating and a $30 price target. Analysts said in a note that “as the life insurance operation of AIG, Corebridge has in recent years delivered more than $2B annually in adjusted earnings and cash distributions to its former parent. In the future, we see that cash coming to shareholders in the form of both dividends (currently targeted at $600M annually) and share buybacks, which we would expect to commence within a few quarters.”
Other notable analyst ratings for Corebridge on Monday included JPMorgan starting the stock at Neutral, RBC capital assigning it an Outperform rating, Goldman Sachs starting it at Neutral and BofA assigning a Buy rating. In total, eight analysts assigned bullish ratings on the stock, while three issued Neutral ratings.
