Sun Life Financial received an investment-rating upgrade Wednesday from RBC Capital Markets to an outperform rating from sector perform, as the firm said it is seeing signs of improvement at the financial-services company’s MFS Investment Management unit and believes the stock’s valuation is attractive. The firm kept its price target on the stock at CAD51, which compares with a Tuesday closing price of CAD43.83 or the company’s Canadian shares. It noted it had downgraded its investment rating on the shares in February, and the stock price declined by about 12% since then.
RBC said it has tracked an improvement in net flows at MFS and growth in assets under management was strong for the first two months of Q2. “We have tracked approximately +US$0.5 billion of retail net sales at MFS and have estimated -US$1.1 billion of institutional outflows for the first two months of Q2 (albeit we admit to some tracking error),” the firm said. It added: “This represents a significant improvement compared to -US$11.1 billion of total net outflows in Q1/17 and -US$9.5 billion of total net outflows in Q4/16.”