Softness in Asset Management Weighs on Manulife

No-moat Manulife reported a core earnings per share decline of 6% to CAD 0.78 per share in the second quarter, though this finished CAD 0.02 above the FactSet consensus. Insurance results were mixed, while the firm’s wealth and asset management unit saw the impact of lower asset levels and lackluster flows. As we tweak our model, we are reducing our fair value estimate to CAD 27 from CAD 28 to account for asset-based headwinds. We are also reducing the Morningstar Uncertainty Rating to Medium from High on Manulife as we believe a Medium rating more accurately reflects the risk of holding Manulife’s shares.