Sun Life Financial Analysts Highlight Strong Q2 Earnings, Driven By Canadian, Asian Growth

Shares of Sun Life Financial Inc SLF were climbing higher on Tuesday, after experiencing volatility ahead of the company's second-quarter earnings.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

RBC Capital Markets On Sun Life Financial

Analyst Darko Mihelic maintained an Outperform rating and price target of C$76.

Sun Life Financial's second-quarter underlying earnings came in at $1.72 per share, above consensus of $1.58 per share, “primarily reflecting strength in SLF Canada followed by SLF U.S. and Asia to a lesser extent,” Mihelic said in a note.

The SLF Canada segment's underlying earnings were significantly higher than expected and grew both sequentially and year-on-year, the analyst stated. While the SLF U.S. segment's underlying earnings were up around 8% sequentially, they declined by about 5% year-on-year, with Medicaid/Medicare Advantage sales continuing to be pressured, he added.

Check out other analyst stock ratings.

Scotiabank On Sun Life Financial

Analyst Meny Grauman reiterated a Sector Outperform rating and price target of C$73.

After reporting disappointing results for the first quarter, Sun Life Financial came back on track in the second quarter, Grauman said. Although the company's results were expected to improve sequentially, the bounce back was "larger than we had expected," he added.

Adjusted earnings grew 10% year-on-year and 15% quarter-on-quarter, "driven by higher fee income in Asset Management, Canada, and Asia, higher earnings in Individual Protection due to strong business growth in Asia and Canada and favourable mortality experience, and lower expenses reflecting lower performance-based compensation and financing costs," the analyst stated.

There was a sequential improvement in underlying earnings in the US segment, "despite the continued headwinds from Medicaid redeterminations in the dental business and normalizing utilization in the stop-loss business," he added.

SLF Price Action: Shares of Sun Life Financial had risen by 5.06% to $50.43 at the time of publication on Tuesday.

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