Globe Life shares pricing in ‘relatively onerous outcome,’ says JPMorgan

JPMorgan analyst Jimmy Bhullar believes Globe Life is among the most compelling stocks in the insurance sector, and one that “presents esoteric risk/upside that is not correlated with macro or sector-specific trends.” Although there is downside risk to shares if the recent allegations are proven true, the stock price is already discounting a “relatively onerous outcome, even following its recent recovery,” the analyst tells investors in a research note. The firm believes the significant recent volatility in Globe Life shares affirms its view that the stock price is being driven more by fear and technical factors than a fundamental analysis of the economic value of the business under reasonable positive or negative scenarios. It believes management addressed concerns about the most serious allegations – the Renee Zinsky lawsuit and accusations of kickbacks – and provided its justification for not including the Department of Justice inquiry in the annual filing. JPMorgan keeps an Overweight rating on the shares with a $136 price target.