Primerica upgraded at BMO, citing the insurer is 'still not past its prime'

BMO Capital Markets has upgraded Primerica Inc. to a "Strong Buy" rating, indicating confidence in the company's resilience despite macroeconomic challenges.

The company has shown impressive growth and superior stock performance due to its unique business model targeting middle-income consumers and a dedicated salesforce that minimizes price competition.

Primerica's structure provides protection against rising competition in the life and annuity products market, further contributing to its favorable outlook.

BMO has set a target price of $318.00 for Primerica, aligning with the broader analyst consensus that suggests a "Buy" rating for the stock.

Investment Recommendation Rating: Strong Buy

Primerica Inc. (NYSE: PRI), a prominent player in life and health insurance, has recently received an upgrade from BMO Capital Markets, which emphasizes that the company remains robust despite facing certain macroeconomic challenges.

In pre-market trading on Tuesday, shares of Primerica showed an increase of 0.83%, reaching $274.53.

According to BMO's research note, Primerica has demonstrated to investors that having a dedicated salesforce—focused exclusively on its offerings—reduces the necessity to engage in price wars with competitors. The firm's distinctive business model, which targets middle-income consumers, has historically led to impressive growth, enhanced free cash flow conversion, and superior stock performance compared to its peers.

BMO further noted that Primerica's structure offers a degree of protection against rising competition, particularly within the upper market segment for specific life and annuity products.

As part of this upgrade, BMO has elevated its recommendation on Primerica’s stock to "Outperform" and established a target price of $318.00.

This new rating corresponds with the general consensus among analysts, aligning with both the average assessments from various authors and a Quant rating suggesting "Buy." In contrast, some sell-side analysts currently maintain a "Hold" stance on the stock.