Manulife Financial's (MFC) Canada business may rebound earlier and more strongly than expected but sustained outperformance would require stronger contributions from Asia and Global Wealth and Asset Management, RBC Capital Markets said Friday.

The company's Q1 core EPS was CA$1.06 ($0.77), below RBC's estimate of CA$1.11 and consensus of CA$1.10. The miss was driven by weaker-than-expected results in Canada, Corporate & Other, and Global Wealth and Asset Management, according to the note.

RBC lowered its core EPS estimates to CA$4.44 from CA$4.57 in 2026 and to CA$4.90 from CA$4.97 in 2027.

Canada core earnings of CA$352 million were below RBC's estimate of CA$409 million. The firm expects Canada insurance experience to normalize by year-end but models Canada core earnings to decline about 6% in 2026.

Corporate & Other posted a core loss of CA$115 million, larger than RBC's expected loss of CA$65 million, while GWAM core earnings of CA$448 million also came in below forecast.

RBC kept an outperform rating on Manulife Financial with a price target of CA$55.

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