TORONTO (Reuters) - Sun Life Financial (SLF.TO) is sticking with an admittedly “ambitious” target of C$2 billion ($2.00 billion) in operating profit by 2015, despite a difficult outlook for financial markets, the Canadian insurer’s chief executive said Thursday.
Sun Life unveiled the profit target in March, one that depends on equity markets and bond yields rising from the levels of earlier this year. While stock markets have edged higher, bond yields have remained low and few economists project an imminent rebound.
“We’re still very much focused on those 2015 targets. We described them back then as ambitious but achievable, and that’s how we continue to view them,” Dean Connor, the company’s CEO, said in a interview.
His comments came as Sun Life’s shares surged 4 percent, boosted by a stronger-than-expected third-quarter profit reported late on Wednesday. Those results spurred several investment houses - UBS, RBC and Canaccord Genuity among them - to raise their share-price targets for the insurer.
Persistently weak markets spurred Sun Life rival Manulife Financial (MFC.TO) earlier on Thursday to delay by a year its own 2015 objective of C$4 billion in profit.
Connor said the profit target was based on organic growth, but said Sun Life was not ruling out acquisitions.
“We’re in the deal flow. These would tend to be smaller acquisitions, but things that extend our capabilities, or for example in Asia, give us broader geographic dispersion or broaden our product mix,” he said.
He said any deals would likely be valued in the low hundred millions.
He would not comment on recent rumors that Sun Life has been looking to sell off it U.S. annuities business.
Sun Life’s shares were up 98 Canadian cents at C$25.35 just after midday on Thursday.
The stock is up more than 34 percent so far this year, but is trading at less than half of its record high of C$56.50 hit in late 2007.
Reporting By Cameron French; Editing by Peter Galloway