MBI - Assured Guaranty FY23 Results Preview: Focus On Buybacks But Is The Insurance Business Still Loss Making?
2024-02-23 13:36:37 ET
Summary
- Assured Guaranty's FY23 results will be published on February 27, 2024. The earnings call is scheduled for February 28, 2024.
- This article analyses the top five items to watch for when analyzing the company's FY23 results.
- We expect that the main driver of share price movement, as in previous earnings calls, will be the buyback program and the prospect of a special dividend.
- AGO will have to provide a credible plan for its under-performing insurance business, and act boldly in the interest of its shareholders.
Assured Guaranty ( AGO ) will publish FY23 results on February 27, 2024 with the earnings call taking place on February 28, 2024. This article provides guidance to analysts/investors by cutting through the noise and focusing on the five most relevant items to consider when reviewing the FY23 results. We have been asked frequently by SA readers about our investment rationale. For transparency, we list and describe the main items that we will monitor to decide whether to maintain the bullish view on the stock that, as announced in our SA comments, we have held since October. The stock is over 40% up since then.
Top five items to watch for when analyzing AGO's FY23 results :
- Buyback Program - Has AGO fully utilized its 2023 repurchase capacity and is the 2024 authorization $500M as usual?
- Special Dividend - What is the status of the request made by the board in 3Q23? Could there be a massive, MBIA-style, dividend?
- Loss & LAE - Will the recent bad news regarding the two most problematic exposures/litigations (PREPA's Grid v Greed & the £125M legal fight against NHS UK) increase Loss & LAE and cause reputational damage?
- Investment Income - Has AGO fully exploited the current high-interest rates, or is it being hindered by S&P's investment constraints?
- Insurance Business Profitability - Has AGO been able to create enough PVP for its insurance business to be profitable after costs (even before considering future claims) or should this business area be reconsidered/downsized?