Genworth Climbs as Citigroup Upgrades on Plan to Cut Australia-Unit Stake
Genworth Financial Inc. (GNW), the life insurer and mortgage guarantor, rose the most in the Standard and Poor’s 500 Financials Index as Citigroup Inc. (C) upgraded the company on its plan to sell a stake in an Australian unit.
Colin Devine, an analyst at Citigroup, raised his rating to “neutral” from “sell” and lifted his price target to $8 a share from $5. As much as 40 percent of the Australia mortgage- insurance business may be sold as an initial public offering in 2012, the Richmond, Virginia-based company said Nov. 3.
“The move could shore up Genworth’s balance sheet while simultaneously improving financial flexibility,” Devine said today in a note.
Genworth Chief Executive Officer Michael Fraizer is seeking to bolster the company’s balance sheet after recording losses related to home loans. The company sold its Medicare supplement business to Aetna Inc. this year and divested a portion of its Canadian mortgage insurer in 2009.
Genworth rose 40 cents, or 6.1 percent, to $6.95 at 4:15 p.m. in New York. The insurer is down almost half this year compared with the 17 percent decline in the 81-company S&P 500 Financials Index.
To contact the reporter on this story: Maryellen Tighe in New York at email@example.com
To contact the editor responsible for this story: Dan Kraut at firstname.lastname@example.org