Sandler O'Neill analyst John Barnidge on April 7 downgradedAmerican Equity Investment LifeHolding Co. to "hold" from "buy," after theU.S. Department of Labor issued the final fiduciary standard .

Barnidge said the fiduciary rule will likely have an adverseimpact on the fixed index annuity market because the federal government addedindexed annuities to the list of products that can be sold only by advisers whoagree to meet higher consumer protections. American Equity Investment Life isheavily dependent on fixed index annuity sales, but the company may not see animpact during this year and the next because the full implementation of therule is not anticipated until January 2018, he said.

Barnidge expects further weakness in the company's shares inthe coming months from the settling of a forward sale agreement expected inAugust. The company raised capital in August 2015 to support growth in sales ina transaction that involved a forward sale agreement amounting to roughly 5.59 million shares fortotal proceeds of about $135 million. The analyst anticipates weakness inshares from dilution once it is formalized.

The analyst reduced the price target on the company's stockto $15 from $20. He maintained EPS estimates of $2.53 for 2016 and $2.65 for2017.