Salomon Smith Barney downgrades Allmerica Financial (AFC) to outperform from buy.
Analyst Colin Devine downgrades the stock in advance of a Dec. 13, 2001 analyst meeting. Devine believes the EPS outlook for 2002 will fall considerably short of current Street expectations due to less favorable property/casualty reserve development, reduced fee income due to lower separate account AUM, higher variable annuity guaranteed minimum death benefit costs and significant increase in employee pension plan costs. The company will also have to face higher reinsurance costs as a result of the Sept. 11 attacks. He cuts his target tp $45, from $50.