Globe Life Inc.'s "differentiated" and "well-established" distribution network, specifically its wholly owned exclusive agencies, is "hard to replicate," according to Credit Suisse analyst Andrew Kligerman.
Kligerman started coverage of Globe Life, formerly Torchmark Corp., at "outperform" with a price target of $114. The analyst said the company's outlook is superior to life and property and casualty peer groups.
Globe Life's name change, as well as its investment in data analytics and other technologies, will most probably aid recruitment and sales, Kligerman said. He also said the company's basic whole life, term life and supplemental health insurance products enable consistent underwriting performance.
The Credit Suisse analyst said his valuation on the company implies a 20% upside, based on a 15% premium to the median price-to-earnings ratio of other public personal lines underwriters. Globe Life's lower pricing pressure and strong long-term growth outlook warrants that premium and further implies a 16x multiple to the 2020 EPS estimate of $7.20, Kligerman added.
