EQH - Corebridge stock upgraded to Buy at Goldman as valuation overstates risks

2023-04-04 11:15:14 ET

Goldman Sachs analyst Alex Scott upgraded Corebridge Financial ( NYSE: CRBG ) to Buy from Neutral as the analyst expects valuation allowances against its mortgage loans will cushion the impact of commercial real estate losses.

Further, the life insurer's stock has been pressured due to regional bank difficulties and the subsequent read-across on surrender rates, "which we do not see as a risk for CRBG's net flows," Scott wrote in a note to clients.

In addition, the stock's depressed valuation is lower than peer variable annuity companies, "despite a more benign profile," he said.

"As such, we see favorable upside in the stock driven by pricing pressure that is not reflective of its asset and liability risk," Scott added.

Year-to-date, Corebridge's ( CRBG ) total return is -21% , compared with -12% for Equitable Holdings ( EQH ), and -4.8% for Reinsurance Group of America ( RGA ), the analyst's other top picks in life insurance.

Goldman's Buy rating on Corebridge ( CRBG ) aligns with the average Wall Street rating .

CRBG does not yet have a SA Quant rating as it has been less than a yea r since it was spun off from AIG ( AIG ) through an IPO.

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