Analyst Forecasts Bright Future For Sun Life Financial: Upgrades To Outperform, Expecting Strong EPS Growth

RBC Capital Markets analyst Darko Mihelic upgraded Sun Life Financial Inc SLF to Outperform from Sector perform at an increased price target of C$79 from C$76.
The analyst is bullish on the above-expectations core earnings in the other segments despite weaker-than-expected Wealth Management and Corporate business in Q1 2023.
Last week, Sun Life reported Q1 underlying EPS of C$1.52, which came close to the consensus and RBC Capital Markets estimate.
The company also increased the dividend per share to C$0.75 from C$0.72.
Mihelic projects improvement in the Wealth business and believes SLF's Q1 underlying ROE of 17.3% is the highest among its Canadian peers (average of 14.5%). The analyst is also upbeat on SLF's underlying ROE target of over 18% in the medium term.
The analyst raised the estimate for underlying EPS to C$6.80 (from C$6.47) and book value per share (including AOCI) to C$38.49 (from C$38.37) in 2023.
Mihelic expects underlying EPS of C$7.55 in 2024 and C$8.15 in 2025 and book value per share (including AOCI) of C$43.00 in 2024 and C$47.85 in 2025.
Price Action: SLF shares are trading higher by 2.19% at $49.00 on the last check Monday.

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