On Friday, CFRA increased its price target on shares of Globe Life Inc. (NYSE: NYSE:GL) to $136 from the previous target of $125, while keeping a Hold rating on the stock. The adjustment reflects a valuation of Globe Life shares at 11.1 times the firm's 2025 operating earnings per share (EPS) estimate, which was also raised by $0.20 to $12.25. Similarly, the 2024 EPS estimate saw an increase of $0.20 to $11.50. This new target compares to the stock's one-year average forward multiple of 10.6 times and stands above the average of 8.5 times for its peers.
Globe Life's fourth-quarter operating EPS of $2.80 exceeded both CFRA's estimate of $2.72 and the consensus estimate of $2.73. This outperformance was attributed to a 4% increase in life premiums, which surpassed the firm's growth forecast of 3% to 6%, and a 3% rise in health premiums, which also exceeded expectations of a 2% to 5% increase. The company's full-year 2023 operating EPS of $10.65, an improvement from $8.15 ($9.71 as restated), also surpassed both CFRA's estimate and the consensus view of $10.57.
Looking forward, CFRA anticipates operating revenue growth for Globe Life of 4% to 6% in 2024, driven by an expected rise in life premiums of 4% to 7% and health premiums of 3% to 5%. Despite the positive performance, CFRA considers the shares to be fairly valued at their current levels, trading at 10.9 times the firm's 2024 EPS estimate. Additionally, the firm notes Globe Life's dividend yield is below the peer average at 0.7%.
InvestingPro Insights
As Globe Life Inc. (NYSE: GL) garners attention with CFRA's updated price target, InvestingPro offers additional insights that may be of interest to investors. With a market capitalization of $11.76 billion, Globe Life is trading at a price-to-earnings (P/E) ratio of 12.19, which is adjusted to 12.12 for the last twelve months as of Q4 2023. This is particularly noteworthy as the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting potential value for investors looking for growth at a reasonable price.
Moreover, Globe Life has demonstrated a strong commitment to shareholder returns, having raised its dividend for 8 consecutive years, with a current dividend yield of 0.72%. This is complemented by a dividend growth of 8.43% over the last twelve months as of Q4 2023. For investors seeking stability, the company's stock generally trades with low price volatility, which may appeal to those with a more conservative investment approach.
An important upcoming date for Globe Life is April 17, 2024, when the company is expected to announce its next earnings. Investors may want to mark this date, as 5 analysts have recently revised their earnings upwards for the upcoming period, indicating potential optimism about the company's financial prospects.
For those interested in further analysis and metrics, InvestingPro provides additional InvestingPro Tips, with 6 more tips available for Globe Life, offering deeper insights into the company's financial health and market performance. To access these tips and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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