Primerica's Robust Potential In Middle-Market Consumers: Insights From Truist Securities Analyst

Truist Securities analyst Mark Hughes reiterated a Buy rating on Primerica, Inc. PRIraising the price target to $240 from $220.

The analyst sees a meaningful acceleration in transaction volume for Primerica, which is a positive indicator of the company's fundamentals in the second quarter, expected to be reported next month.

The analyst notes that Primerica's large sales force allows it to efficiently reach middle-market consumers, primarily ignored by competing insurance companies and financial advisors. 

Hughes bumped up the 2023 EPS estimate to $15.25 from $15.20 and the 2024 EPS forecast to $17.10 from $17.00.

The upswing is based on the favorable impact on the Investment & Savings Product (ISP) segment of the stronger performance of the S&P 500.

Hughes remains particularly optimistic about the company's highly-recurring Term Life revenue model and potential to benefit from stepped-up policy demand.

The analyst also remains upbeat on growth in applications for individual life insurance policies in the first two months of the second quarter (up 5.8% industry-wide) in the age categories between 0-50, most relevant to Primerica.

Industry-wide, term life sales advanced 4.7% in May compared to a gain of 8.9% for whole life and 13.1% for indexed universal life (which has a cash value component typically tied to stock market indices).

Based on the above, the analyst raised the second-quarter EPS estimate to $3.75 from $3.74. Total revenues for the quarter to be reported is expected to rise by 5.1% Y/Y to $706.24 million.

Price Action: PRI shares are trading higher by 1.05% to $201.22 on the last check Monday.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorEquitiesNewsPrice TargetReiterationMarketsAnalyst RatingsTrading IdeasGeneralBriefsExpert Ideas
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!