AnalystConsensusTarget updated the narrative for GWO

Analysts have increased their price target for Great-West Lifeco from C$56.50 to C$58.82. They cite expectations for continued asset growth and platform expansion, which are anticipated to drive earnings upside and profitability improvements.

Analyst Commentary

Recent research notes highlight differing perspectives on Great-West Lifeco’s outlook, valuation, and growth trajectory. The company has drawn favorable rating initiations and price target increases associated with asset momentum and platform expansion initiatives.

Bullish Takeaways

• Bullish analysts see the potential for more than 8% upside to consensus 2026 earnings per share, citing robust growth in Retirement and Wealth assets under management.
• The company's strategic acquisitions of 401k platforms and continued efforts to transition retirees to its wealth platform are viewed as catalysts for incremental re-rating and valuation improvement.
• Ongoing asset growth and the expansion of operational platforms are expected to fuel earnings upside and bolster profitability over the medium term.
• Recent upward adjustments to price targets reflect optimism around execution on strategic initiatives and sustained growth in managed assets.

Bearish Takeaways

• Bearish analysts remain cautious about the pace and effective integration of acquired 401k platforms, which could present execution risk.
• There are concerns regarding the company's ability to consistently convert retirees to its wealth platform in a competitive industry environment.
• Some analysts note that elevated price targets depend on continued outperformance in asset growth, which may be susceptible to market volatility.
• Further upside to valuation depends on successful delivery of expanding profit margins, which could encounter challenges from rising operating costs or regulatory changes.

What's in the News

• Great-West Lifeco Inc. (TSX:GWO.PRT) and (TSX:GWO.PRZ) were added to the S&P/TSX Preferred Share Index (Key Developments).
• On September 3, 2025, the company announced an increase in its equity buyback plan by 20,000,000 shares, bringing total authorization to 40,000,000 shares (Key Developments).
• From April 1, 2025 to June 30, 2025, Great-West Lifeco repurchased 6,262,494 shares for CAD 321 million, completing the repurchase of 8,384,563 shares for CAD 432 million under its January 2025 buyback plan (Key Developments).
• During the second quarter 2025 conference call, the company reiterated openness to M&A, with a focus on workplace acquisitions in the U.S. and disciplined, technology-enabled growth strategies (Key Developments).

Valuation Changes

• The Fair Value Estimate has risen from CA$56.50 to CA$58.82, reflecting a moderate upward adjustment in analyst models.
• The Discount Rate remains unchanged at 5.97%, indicating a stable risk assessment by analysts.
• The Revenue Growth Projection is virtually flat and holds steady at approximately 5.83%.
• The Net Profit Margin has increased slightly from 10.11% to 10.47%, suggesting incremental improvements in profitability have been factored into forecasts.
• The estimated Future P/E Ratio has edged up from 14.95x to 15.02x, representing a minor increase in valuation expectations.