William Blair initiated coverage of CNO Financial Group Inc. at "outperform" on the expectation that the company will gradually return to growth over the next several years.
Analyst Adam Klauber wrote that the company is well-positioned to serve middle-income Americans at or near retirement who are underinsured or do not receive professional financial guidance.
And with 10,000 baby boomers retiring per day, the need for protection/retirement products is growing, he said, noting that competitors have moved away from this space due to lower premium levels and the need for expensive captive agents.
Klauber said CNO Financial is re-energizing its captive agency force by shifting focus toward retention and experience. Agents are transitioning to more of a financial adviser role with the recent addition of brokerage services, which should improve retention and productivity as well, he added.
The analyst's EPS predictions are $2.10 and $2.35 for 2018 and 2019, respectively.
