02:20 PM EDT, 06/11/2025 (MT Newswires) -- National Bank of Canada on Wednesday reiterated its outperform rating on the shares of Definity Financial ( DFYFF ) while raising its price target to $90.00 from $75.00 folwing the closing of its $385 million equity offering, to be used to finance the acquisition of Travelers' Canadian operations.

The bank added that its net operating earnings per share forecast of $3.09 in 2025 and $4.03 in 2026 reflect accretion from the transaction. It resumed coverage of the stock and increased the price target to $90 based on a near 2.6 times multiple on its book value estimate.

"We increased our target multiple from 2.2x as we gain confidence in the ROE expansion story," said analyst Jaeme Gloyn.

The bank said the deal makes Definity the fourth-best P&C insurance player in Canada, strengthens position in commercial lines, scales personal lines adding $1 billion in premium and strengthens leadership in the broker channel by integrating Travelers Canada's broker relationships, with increased breadth of product offerings facilitating further share of wallet growth.

National Bank also believes the deal is immediately accretive to operating EPS, expects internal rate of return of over 20% and targets $100 million in pre-tax run-rate synergies through expense synergies and scale benefits over three years. It sees DFY's balance sheet optimizing through deploying excess capital and introducing leverage.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 75.55, Change: +1.95, Percent Change: +2.65