GWO: Retirement And Wealth Expansion Will Support Durable Medium-Term Earnings Outlook

Analysts have raised their consolidated price target on Great-West Lifeco to a mid C$60s range, reflecting modest upside from prior levels. They highlight stronger long term earnings potential from retirement and wealth assets under management growth and expected benefits from 401k platform acquisitions.

Analyst Commentary

Analyst commentary on Great West Lifeco has turned incrementally more constructive, with several price target increases clustered in recent days. The revisions reflect growing confidence in the companys ability to translate retirement and wealth assets under management growth into higher earnings and shareholder returns.

Bullish Takeaways

• Bullish analysts are lifting price targets into the high C$50s to high C$60s range, which signals confidence that valuation can expand as execution on the retirement and wealth strategy continues.
• Upside to consensus 2026 earnings forecasts is seen above 8 percent, supported by steady growth in retirement and wealth assets under management and operating leverage across the platform.
• The acquisition and integration of 401k platforms is viewed as a key structural growth driver, with potential for incremental re rating as synergies are realized and distribution reach expands.
• Conversion of retirees from workplace plans into the companys wealth platform is expected to enhance fee based revenue visibility, supporting a higher multiple on more durable earnings streams.

Bearish Takeaways

• More cautious analysts are raising targets only modestly and keeping recommendations at neutral like stances, which suggests lingering concerns about valuation after the stocks recent performance.
• There is uncertainty around the pace and efficiency of integrating newly acquired 401k platforms, with execution risk that could delay the earnings uplift currently embedded in optimistic scenarios.
• Some investors remain focused on macro and market sensitivity in wealth and retirement businesses, which could pressure assets under management growth and fee income in weaker market environments.
• While long term earnings potential is acknowledged, a portion of the growth story is still contingent on delivering planned platform conversions and cost synergies on schedule, which leaves limited room for missteps.

What's in the News

• Completed a substantial share repurchase program, buying back a total of 18,662,858 shares, representing 2% of shares outstanding for CAD 995 million, including 10,278,295 shares repurchased between July 1 and November 5, 2025, for CAD 563 million (company buyback update).
• Great-West Lifeco Inc. preferred share series GWO.PRZ was added to the S&P/TSX Preferred Share Index, potentially improving visibility and index-driven demand for the security (index constituent add).
• Great-West Lifeco Inc. preferred share series GWO.PRT was also added to the S&P/TSX Preferred Share Index, further expanding the company's representation in key Canadian preferred share benchmarks (index constituent add).

Valuation Changes

• The Fair Value Estimate remains unchanged at approximately CA$63.08 per share, indicating no revision to the intrinsic value outlook.
• The Discount Rate has edged down marginally to about 6.12 percent, reflecting a negligible change in the risk and return assumptions applied to future cash flows.
• The Revenue Growth Assumption is effectively unchanged at roughly 6.07 percent annually, suggesting a stable view on top line expansion prospects.
• The Net Profit Margin Forecast remains virtually flat at around 10.70 percent, implying no material shift in projected profitability levels.
• The Future P/E Multiple stays steady at roughly 14.6 times earnings, signaling an unchanged view of the appropriate valuation multiple for the company’s forward earnings.