Adjusting the Model For Hartford Funds Sale

研报英文原文证据摘录

Adjusting the Model For Hartford Funds Sale

C O M PA N Y N O T E

J u n e 1 1 , 2 0 2 6

Hartford Financial Services (HIG) Overweight

CONCLUSION PRICE: US$129.26

We are updating our EPS model to incorporate the sale of HIG's asset management TARGET: US$148.00

business to Wellington. The asset management will be treated as a discontinued business Our $148 price target is based on a multiple of

in the second quarter which means it will be excluded from operating EPS and, therefore, 11.0x our 2027E EPS of $13.43.

reduce reported operating results. While the sale may mean a long-term benefit to cash

flow, the sale will have a negative impact on reported earnings. Paul Newsome, CFA, CPCU

Managing Director, Piper Sandler & Co.

312 281-3445, paul.newsome@psc.com

• On 6/3/26, Hartford announced that Wellington and HIG have entered into a definitive Cam Bianchi

agreement under which Wellington will acquire Hartford Funds for $300 million upfront Research Analyst, Piper Sandler & Co.

and additional payments based on the available after-tax cash generated by the 612 456-9841, cam.bianchi@psc.com

combination of Hartford Funds’ business and Wellington’s business supporting Hartford Changes Previous Current

Funds over 7 years following the close of the transaction. Rating — Overweight

Price Tgt US$154.00 US$148.00

• Dilutive in the Near Term but Longer Term Accretive. Hartford funds income will flow FY26E EPS US$13.00 US$12.48

through net income but not into core earnings, so the cash at closing as well as the ~ FY27E EPS US$14.00 US$13.43

$65 million per quarter will not flow through to EPS. We are assuming this capital goes Market Cap. (mil) US$36,179.9

towards buybacks. Removing Hartford Funds core earnings from our 2027E EPS lowers Book Value/Share US$67.50