Great-West Lifeco Inc
GWO: XTSE (CAN)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
CAD 75.00 | Kbwk | Clwbhhw |
Hurricane Ian Provision, Weak Markets Dampen Great-West’s Profits
Great-West Life had a mediocre third quarter with adjusted earnings per share of CAD 0.74 missing the FactSet consensus estimate of 0.79. The culprit is the deteriorating macroenvironment. Weaker asset levels are weighing asset-based fees in both equities and fixed income. Also of note, Great-West took a CAD 130 million provision related to Hurricane Ian as its capital and risk solutions segment provides reinsurance. Expenses continue to be relatively well controlled in our view and were up 4% on an organic constant currency basis. We will maintain our no-moat rating and fair value estimate of CAD 40 on Great-West’s shares.