Analysts affirm "Outperform" rating for Conseco

Friedman, Billings, Ramsey & Co. analyst Randy Binner said in a research note, "the gradual turnaround of this distressed company is progressing and that negative market reactions to (the first quarter) earnings were overdone."

Conseco said losses available to common shareholders were $5.8 million, or 3 cents per share, during the first quarter. Operating income, which does not include $26.5 million in investment losses, totaled $20.7 million, or 11 cents per share.

Conseco has worked hard to stabilize its long-term care run-off segment, which has helped the company in its turnaround efforts, Binner wrote in the note.

Some volatility that affected Conseco's first-quarter earnings were seen throughout the industry and not just company specific, Binner added.

Binner reaffirmed a price target of $17 as well.

While Keefe, Bruyette & Woods Inc. analyst Jukka Lipponen reiterated an "Outperform" rating, he cut his price target and earnings estimates for the insurer.

Lipponen reduced his price target to $15 from $16, saying that lower price reflects instability in earnings. Once Conseco can stabilize special charges and show consistent earnings, the price is likely to climb higher, Lipponen wrote in a research note.

Lipponen cut his 2008 earnings estimate for Conseco to $1.02 per share from $1.24 per share, while the 2009 estimate was reduced to $1.25 per share from $1.54 per share.

Shares of Conseco rose 2 cents to $11.14 in late morning trading.