22 hours Ago
Despite being positive on Reinsurance Group of America for a bit, JPMorgan finally sees the right moment for investors to jump in as the sector faces a deteriorating economic backdrop. Analyst Jimmy Bhullar upgraded the reinsurance stock to overweight from neutral and lifted his price target by $5 to $237. Bhullar's refreshed target suggests shares can rally 19.
5% above Tuesday's closing level. "Our fundamental outlook for RGA has been upbeat, but we have been reluctant to recommend RGA shares due to concerns about optimistic EPS forecasts, bullish investor sentiment, and a full valuation," Bhullar wrote to clients. "However, we feel that EPS projections are more reasonable.
" Bhullar cited an individual life reinsurance transaction with primary insurer Equitable Holdings as a key driver of earnings per share projections becoming more rational. That transaction led Bhullar to increase estimates for earnings per share. He also noted that sentiment is less bullish and valuation is more attractive following a recent rough patch.
Shares have struggled since early February, when the company gave what Bhullar described as a "weak" earnings report for the fourth quarter. Elsewhere, Bhullar said the Missouri-based company's business mix makes it more defensive than most life insurers in uncertain macro environments. Looking under the hood, the analyst said the company's work gives it minimal exposure to equity-sensitive businesses and a weaker tie to interest rates.
Bhullar's call is an idiosyncratic move. JPMorgan downgraded life insurance stocks as a whole to neutral from positive, citing a more balanced risk-reward ratio as valuations recover and the macro environment weakens. Despite JPMorgan's upgrade, Reinsurance Group of America shares ticked 0.
7% lower before the bell on Wednesday. Shares have dropped more than 7% in 2025. RGA YTD mountain Reinsurance Group of America, year to date Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange!|Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange.
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