- BMO Capital analyst Tom MacKinnon downgraded Manulife Financial Corp (TSX:MFC) (NYSE:MFC) to Market Perform from Outperform, citing weak 1Q22 results and disappointing IFRS17 disclosure.
- The analyst also lowered the price target to C$27 from C$37.
- MacKinnon states that while MFC points to perhaps a larger than expected 20% decline in BVPS/10% decline in core EPS upon transition to IFRS17 in 2023.
- Also See: Manulife's Q1 Earnings
- The company's disclosure provided little detail to assess the growth/earnings profile under IFRS17, particularly for the all-important CSM.
- While a resilient balance sheet and strong excess capital position help, MacKinnon prefers to pause and reassess how MFC's KPIs, including the all-important contractual service margin (CSM), unfold in 2023 under IFRS17.
- Price Action: MFC shares are trading lower by 10.35% at C$21.83 on TSX and lower by 10.68% at $16.72 on NYSE on the last check Thursday.
