Best Insurance stock - LFC stock prices forecast 2013 : China Life Insurance (NYSE: LFC) reported a net loss in the third quarter, due to a surge in operating expenses, which offset the operating income increases. However, premiums earned and investment income witnessed a notable improvement. Total assets and shareholders’ equity also improved, while cash fund deteriorated. Meanwhile, the subordinated debt issue has improved solvency ratio.
Extensive domestic distribution channel, strong investment and stable ratings are other positives. However, the constant decline in operating cash flow is affecting financials. The company also inherently faces substantial interest rate and currency risks, which limit the upside. Despite a strong brand name, significant competition on the domestic front hampers earnings growth. Overall, we expect limited upside in the near term
China Life Insurance Co Ltd announced that it expects its net profit for the first three quarters of fiscal year (FY) 2012 decrease by approximately 55%, compared to the net profit of the same period in FY 2011 (RMB 16,717,000,000). The Company cited the decreased rate of return on investments and impairment loss on assets as the main reasons for the forecast.
Shares of China Life Insurance fell 1.9 percent in Hong Kong from Thursday's 18-month high, while Ping An Insurance , its smaller sector rival, dropped 2.1 percent.
Zacks reiterated their neutral rating on shares of China Life Insurance (NYSE: LFC) in a research report sent to investors on Friday morning on Dec 25th, 2012 The firm currently has a $49.00 price target on the stock.
Fitch Ratings maintains a "stable" outlook for China's insurance sector 2013 , but recent exits by overseas investors' stirred concerns about the sector's profitability. "Our view is that the sector will be stable over the next 12 to 24 months," Terrence Wong, director of Fitch's insurance team, said on Monday. Property insurers' premiums are set to register double-digit growth this year and in 2013, but recent regulatory changes could intensify competition the ratings agency said. Read China insurance market growth outlook 2013
Earnings Growth Forecast
| Fiscal Year End | Consensus EPS* Forecast | High EPS* Forecast | Low EPS* Forecast | Number of Estimates | Over the Last 4 Weeks Number of Revisions Up Down | |
| Dec 2012 | 1.06 | 1.09 | 1.03 | 2 | 0 | 0 |
| Dec 2013 | 2.73 | 2.79 | 2.66 | 2 | 0 | 0 |
| Dec 2014 | 3.07 | 3.07 | 3.07 | 1 | 0 | 0 |
Over the next five years, the analysts that follow this company are expecting it to grow earnings at an average annual rate of 20.19%.This year, analysts are forecasting earnings decrease of -31.61% over last year. Analysts expect earnings growth next year of 157.08% over this year's forecasted earnings
Price/Earning Ratio forecast
Price/Earnings Ratio is a widely used stock evaluation measure. For a security, the Price/Earnings Ratio is given by dividing the Last Sale Price by the Average EPS (Earnings Per Share) Estimate for the specified fiscal time period.
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