AEL - American Equity Life downgraded at Evercore ISI on 'pretty full' valuation

American Equity Life ( NYSE: AEL ) stock dipped 2.8% in Monday morning trading after Evercore ISI cut shares of the life and health insurer to In-Line from Outperform due to a "pretty full" valuation, according to a note written to clients.

As the company's stock trades at ~13x price/free cash flow, "valuation is pretty full given the current macro backdrop, specifically 1) if we enter into a recession we think credit losses among the life insurers will start to emerge, and we see AEL as one of the most at risk life insurers in this regard given its peer-high asset leverage."

The Quant's valuation grade for American Equity Life ( AEL ) is standing at A, with the best marks in price-to-earnings, enterprise value-to-EBITDA and price-to-cash flow.

Evercore ISI also pointed out that recent market volatility will likely pressure the company's required capital generation over the near-to-intermediate term.

After its Q2 earnings last week, American Equity Life's ( AEL ) guidance for cash flow generation was little changed, "and grow cash flow will take longer to play out than we initially anticipated," the note read.

Towards the end of July, American Equity Life cut to Neutral at Credit Suisse on credit concerns .

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