Analyst Note| Rajiv Bhatia, CFA |
No-moat rated Manulife reported decent results amid a challenging low interest rate environment. Core earnings of $0.74 were roughly flat from the year-ago period but beat out the FactSet consensus estimate of $0.56. Core earnings growth was flat due to lower corporate and other segment earnings due to the absence of core investment gains. Canada, Asia, and Global Wealth and Asset Management saw double-digit core earnings growth, while U.S. core earnings declined 1%. After updating our model, we are increasing our fair value estimate to CAD 25 from CAD 23 due to time value of money and a slightly higher investment yield versus our previous model.