Tuesday, Friedman, Billings, Ramsey upgraded Delphi Financial Group Inc. (DFG) shares to Outperform from Market Perform and increased its price target to $26 from $19. However, the brokerage lowered its 2009 EPS estimate to $3.13 from $3.20, and its 2010 estimate to $3.31 from $3.45.
Analyst Randy Binner noted that Delphi announced an equity capital raise of about $58.3 million on April 28, which, along with forecasted earnings, puts the company in a better position to absorb estimated credit losses in 2009 and 2010.
The analyst increased his price target to $26 from $19, which is 2010 BV ex-AOCI, net of earnings and an average of his medium and high-end credit loss assumptions.
The analyst's credit analysis previously viewed Delphi as marginally capitalized to absorb estimated credit losses; the capital raise provides more comfort in this regard. The analyst now estimates excess capital of $212 million to absorb forecasted credit losses of $153 million through year-end 2010.
The analyst said that although there will likely be macroeconomic pressure on the group benefits loss ratio and, to a lesser extent, excess workers' compensation margins, earnings should be enough to generally absorb credit losses, allowing Delphi to maintain adequate risk-based capital ratios at Reliance Standard Life and Safety National.
Currently, DFG is down $2.23 or 11.41% and trading at $17.32.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.