Friday, Credit Suisse downgraded Sun Life Financial Inc. (SLF.TO) shares to Neutral from Outperform and lowered its price target to C$45 from C$52. The brokerage reduced its 2008 EPS estimate to C$3.75 from C$4.00, and its 2009 estimate to C$4.00 from C$4.45.
Analyst Bantis noted that Sun Life reported disappointing operating EPS of C$0.91 for second quarter, down 12% year-over-year and well below his forecast of C$0.98 (consensus - $1.00). Operating return on equity of 12.9% was driven lower by SLF USA and Reinsurance. In addition, Sun Life did not increase its quarterly dividend.
The analyst said that while Sun Life's competitive position in the US Individual Insurance and VA market is not as considerable relative to larger peers, positive trends are emerging. The fixed annuities business, however, continues to dampen consolidated profitability. Putting aside management actions to limit earnings volatility, the near-term prospects for the annuities business remain difficult.
The analyst lowered his 2008 estimate to reflect the difficult operating environment and the C$0.07 shortfall this quarter. As such, the analyst lowered his price target to C$45. SLF's discount valuation at 10.6x P/E (2008) vs. peers (11.5x) appropriately reflects near term challenges.
Currently, SLF.TO is down C$0.90 or 2.26% and trading at C$38.90.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.