Valued at a market cap of $9.2 billion, Globe Life Inc. (GL) is a financial services holding company that provides life insurance, annuities, and supplemental health insurance products. The McKinney, Texas-based company serves middle-income families through its subsidiaries and various distribution channels.
Shares of the life and health insurance company have underperformed the broader market over the past 52 weeks. GL has dipped 6.4% over this time, while the broader S&P 500 Index ($SPX) has rallied 30.4%. In 2024, shares of GL are down 10.3%, compared to SPX’s 23.1% gain on a YTD basis.
Focusing more closely, Globe Life has also lagged behind the Financial Select Sector SPDR Fund's (XLF) 43.8% return over the past 52 weeks and a 32.6% YTD gain.
Despite reporting better-than-expected Q3 adjusted earnings of $3.49 per share on Oct. 23, shares of Globe Life fell 1.3% the following day due to the top-line revenue miss, with operating revenues of $1.5 billion falling short of the consensus estimate. Additionally, a 10% year-over-year decline in health insurance underwriting margins raised concerns about profitability in that segment. Higher administrative expenses, which rose 18.6% year-over-year, further weighed on investor sentiment.
For the current fiscal year, ending in December, analysts expect GL’s EPS to grow 15.6% year-over-year to $12.31. The company's earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 11 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buys,” one “Moderate Buy,” and four “Holds.”
This configuration is slightly more bullish than three months ago, with five “Strong Buy” ratings on the stock.
On Nov. 14, Evercore ISI raised Globe Life's price target to $132 and kept an “In Line" rating, citing a potential re-rating of the life insurance sector due to broader investor interest, risk reduction from alternative managers, and favorable post-election market conditions.
As of writing, GL is trading below the mean price target of $128.64. The Street-high price target of $188, implies a potential upside of 72.2% from the current price levels.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
