Noting 'High-Return Business', Wunderlich Raises Price Target on Delphi Financial Group (DFG)

Wunderlich Securities is raising its price target on shares of Delphi Financial Group, Inc. DFG Thursday, as "recent results underscore our confidence that DFG will achieve our forecast of positive EPS growth in 2011 with a superior ROE of 12.8%." Wunderlich raised its price target to $37 from $34, and reiterated its Buy rating on the stock. Delphi Financial Group reported 1Q11 results in line with expectations of operating EPS of $0.91. Delphi Financial Group is a holding company whose subsidiaries provide integrated employee benefit services. The company manages all aspects of employee absence and provides the related group insurance coverage. Elizabeth C. Malone of Wunderlich Equity Research "believe[s] the company is gaining market share in key markets as represented by annual premium growth in 1Q11 of 8%. ... the premium-to-peers valuation is justified given the company's higher-return investment strategy and superior earnings growth and ROE." Further, "DFG has experienced solid pricing and market share growth in the niche market of excess workers' compensation business. We anticipate the company will continue to grow the high-return business successfully." Shares of DFG closed higher by $0.41 on Wednesday, to $31.57.