Globe Life quiet period creates ‘vacuum’ after short report, says Piper Sandler

Piper Sandler notes that a short report published earlier this morning suggests Globe Life’s American Income division has wider fraud issues than related to the Arias agency, but the firm “would be surprised to hear” the company comment before releasing Q1 earnings in the next couple weeks given the quarter-end and quiet period. This “creates a vacuum leading to investor speculation that Arias plaintiff withdrawing their claims earlier in March might be related to some future class action, says the firm, who notes the stock is down about 25% today, which is “clearly pricing a more adverse outcome than investors were previously expecting from earlier concern limited to just the Arias agency.” This “evolving situation” reminds of headline risk to retail sold products compared to institutional, added Piper, which has an Overweight rating on Globe Life shares.