CFRA, a financial research firm, has adjusted its outlook on Globe Life Inc. (NYSE: NYSE:GL) shares, reducing the price target from $136.00 to $118.00, while maintaining a Hold rating. The revised target price represents a valuation of 10.3 times the firm’s 2024 operating earnings per share (EPS) estimate of $11.50 and 9.6 times the 2025 operating EPS estimate of $12.25. This adjustment comes in light of Globe Life’s performance and market position relative to its peers.

The rationale behind the new price target is grounded in the expectation that Globe Life will achieve operating revenue growth of 4%-6% in 2024 and 3%-7% in 2025, projections slightly above the industry averages. In the previous year, Globe Life’s life insurance premiums increased by 3.6%, and the company is anticipated to see a growth of 4%-7% in the current year.

However, concerns have been raised that if inflationary pressures continue to affect Globe Life’s middle-income target market, sales could potentially decline as consumers adjust their spending in response to higher costs, including those associated with auto insurance. The company’s health insurance premiums saw a 2.8% rise in 2023, with expectations for a 3%-5% growth in 2024. However, this segment faces increased competition which could impact the company’s performance.

CFRA’s assessment also takes into account Globe Life’s risk profile, which is considered below-peer due to the straightforward nature of many of its insurance products. The firm’s analysis suggests that Globe Life’s market position and performance relative to its peers have led to the adjustment in the price target. Investors will be keen to monitor how the company navigates the potential challenges ahead and whether it can sustain its projected revenue growth amidst competitive pressures and market dynamics.