On Thursday, Morgan Stanley (NYSE:MS) initiated coverage on Assurant (NYSE:NYSE:AIZ) with an Equalweight rating and a price target of $251. The firm's outlook is based on expectations that the company will align with its broader insurance peers in terms of valuation metrics by 2025. Currently trading at a P/E ratio of 15.9x and near its 52-week high of $230.55, Assurant boasts a perfect Piotroski Score of 9, indicating strong financial health. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value model.
Morgan Stanley anticipates that Assurant will achieve approximately $800 million in adjusted EBITDA for its Global Lifestyle segment in 2024, which is consistent with the company's own projections of modest growth. This target appears achievable considering the company's current total EBITDA of $1.24 billion over the last twelve months. Want deeper insights? InvestingPro offers comprehensive analysis with 13+ additional ProTips and detailed financial metrics for Assurant.
Looking ahead to 2025, the analyst projects that Assurant's adjusted EBITDA in the Global Lifestyle division will increase to $865 million. They also forecast continued organic growth and margin improvements in the Connected Living segment as investments in clients and programs begin to yield results.
However, challenges in the Global Automotive sector may persist due to claims inflation, though the firm suggests that rate actions and risk management strategies could help mitigate these issues.
In the Global Housing market, Morgan Stanley expects Assurant to reach about $801 million in adjusted EBITDA (excluding catastrophic events, referred to as CATs) by 2025. This projection is based on the company maintaining its current growth trajectory.
The analyst notes Assurant's leading position in the lender-placed insurance business as a potential driver for future growth, but also cautions that catastrophic events and inflation could present downside risks.
Notable strengths include a 21-year streak of dividend increases and impressive YTD returns of 34.79%. Access Assurant's complete financial health analysis and Pro Research Report through InvestingPro, part of our coverage of 1,400+ US stocks.
In other recent news, Assurant, Inc. has announced several key developments. The company presented its third-quarter results for 2024, with President and CEO Keith Demmings and CFO Keith Meier leading the discussion on the firm's financial performance. The call, which was prefaced with a caution about forward-looking statements, emphasized potential discrepancies due to risks and uncertainties. Assurant's reliance on non-GAAP financial measures to evaluate its performance was also highlighted, with reconciliations provided to the GAAP equivalents.
In addition, Assurant has welcomed Kevin Warren, former UPS executive, to its Board of Directors. Warren's expertise in customer experience and digital strategies is anticipated to contribute to Assurant's business operations and growth initiatives. This announcement was made alongside the planned retirement of board member Lawrence Jackson and the departure of Paget Alves, who will assume the role of CEO at Sorensen.
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