Brighthouse Financial (NASDAQ: BHF ), a leading life insurance company, experienced a notable drop in its share price on Thursday. This followed a downgrade by Goldman Sachs (NYSE: GS ) from neutral to sell, leading to a 6.7% decline in the company's shares at 1:20 pm E.T., with the share price falling to $47.85.
The downgrade came in response to Brighthouse's recent disclosure of its multi-year cash flow information, which analysts noted indicated a slower than expected increase in free cash flow. Despite this, the data also showed increased stability across various scenarios.
Analysts have further expressed concerns over Brighthouse Financial's cash flow projections not factoring in potential impacts from changes in economic regulations. This has been highlighted as a risk, given the significant reserve charges observed in the industry and the substantial soft capital that Brighthouse Financial has used to capitalize its legal entity.
In addition to the downgrade, Goldman Sachs also revised its target price for Brighthouse Financial's shares, lowering it from $47 to $43. The financial institution's actions and recommendations have had a direct impact on the insurer's stock performance and market standing.
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