PRU - CNO Financial raised to Overweight at Piper on delta spread net investment income

Piper Sandler analyst John Barnidge upgrades life and health insurer CNO Financial Group (NYSE:CNO) to Overweight on the basis of the spread of COVID-19 variants, favorable financial markets, and overall less investor risk when compared to its peers. Shares of CNO rise 1.8% on Friday, but only up 1% M/M. Barnidge thinks the rise of the COVID-19 variants is likely to drive a greater-than-anticipated level of claims tailwinds for the next couple of quarters, he wrote in a note to clients. At the same time, he expects the company to continue to experience elevated levels of net investment income. CNO generates roughly 30% of its earnings from annuities; benefits from investment income are more than many other life insurers in Barnidge's coverage. Increased price target to $27 from $25, implying ~14% upside from Thursday's close; derived from 2022 estimate multiple rose to 11.7x from 11.1x. The Overweight rating diverges from the Neutral

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CNO Financial raised to Overweight at Piper on delta spread, net investment income