Update (9:53 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- Bank of America/Merrill Lynch upgraded Protective Life (PL) to "buy" from "underperform" and set a $62 price target. The firm believes the company has the best free cash flow outlook in the industry.
The stock was up 0.28% to $50.98 at 9:51 a.m. on Friday.
Separately, TheStreet Ratings team rates PROTECTIVE LIFE CORP as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROTECTIVE LIFE CORP (PL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, notable return on equity and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 10.5%. Since the same quarter one year prior, revenues rose by 26.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 79.26% and other important driving factors, this stock has surged by 36.57% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, PROTECTIVE LIFE CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- PROTECTIVE LIFE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PROTECTIVE LIFE CORP increased its bottom line by earning $4.86 versus $3.64 in the prior year. For the next year, the market is expecting a contraction of 1.2% in earnings ($4.80 versus $4.86).
- You can view the full analysis from the report here: PL Ratings Report