Brighthouse Financial Shares Fall 13% After Ratings Cut
June 25 2019 - 11:39AM
Dow Jones News
By Dave Sebastian
Brighthouse Financial Inc. (BHF) shares fell more than 13% to
$33.10 Tuesday after two investment banks downgraded their ratings
of the life-insurance company.
Credit Suisse Group AG (CSGN) deemed Brighthouse Financial
underperforming, downgrading it from a neutral rating. Goldman
Sachs Group Inc. (GS) downgraded its ratings to sell from
neutral.
Credit Suisse slashed Brighthouse's per-share price target to
$22 from $35, while Goldman Sachs cut it to $32 from $39.
Credit Suisse analysts said the stock is expensive given the
volatility of its distributable earnings and new accounting
pressure. Lower interest rates could reduce the company's
distributable earnings from 2019 to 2021 by $1 billion, "though
favorable equity markets may have largely offset it," Credit Suisse
analysts said in a research note, adding that the condition
illustrates Brighthouse's sensitivity to markets compared with its
peers.
Changes in accounting standards in 2021 by the Financial
Accounting Standards Board, or FASB, could reduce companies' book
value, Credit Suisse analysts said.
Goldman tied its downgrade to how weakened distributable
earnings present risks to the company's capital plans.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
June 25, 2019 11:24 ET (15:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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