Primerica Shares Rise as Raymond James Says Sales May Climb

Jan 15, 2014 4:38 pm ET

(Updates with trading starting in second paragraph.)

Jan. 15 (Bloomberg) -- Primerica Inc. rose the most in almost a year in New York trading after Raymond James & Associates upgraded the stock, saying life-insurance sales to middle-income Americans may increase.

Primerica advanced 4.2 percent to $44.82 at 4:30 p.m., and earlier had its biggest intraday increase since Feb. 8. Raymond James boosted the Duluth, Georgia-based insurer to strong buy from outperform while raising the price target to $51 from $46.

The company, whose stock has more than doubled since Citigroup Inc. started selling its stake to the public in 2010, employs about 90,000 part-time sales representatives. Experienced brokers train new ones for free because they earn commissions on their underlings’ sales. About 44 percent of American households have individual life insurance, Raymond James said, citing industry group Limra.

“The variable-cost nature of Primerica’s part-time sales force, combined with the company’s significant size and economies of scale, allows the company to target the middle- income market successfully despite a relatively small policy size,” Steven Schwartz, an analyst at Raymond James, wrote today in a note to clients. He called Primerica’s target market “seriously underpenetrated.”

Raymond James also raised Bellevue, Washington-based Symetra Financial Corp. to market perform from underperform and lowered McKinney, Texas-based Torchmark Corp. to underperform from market perform. Symetra advanced 2.7 percent to $19.70 and Torchmark was little changed at $78.41.

--Editors: Steve Dickson, Dan Reichl