Globe Life Stock Soars 7% Today—Here’s the Fuel Behind the Rally

Wall Street's latest adrenaline rush came from an unlikely source: insurance. Globe Life stock defied the flatlining market with a nearly 7% vertical climb—no CPR needed.

The catalyst? Probably another earnings beat

Because in today's market, 'meeting expectations' gets you a participation trophy. Beating them? That'll move the needle—even for boring insurers.

Short squeeze or sustainable growth?

Let's be real—when financial stocks pop like this, someone's getting squeezed. Either way, bulls are charging while analysts scramble to upgrade price targets (as usual).

One thing's certain: In a sector that moves at actuarial-table speed, today's action proves even insurance stocks can moon when Wall Street needs its fix. Just don't ask about the claims department.

The end of the affair

Globe Life had actually divulged news of the probe's end last week. Still, the insurer was surely happy to report after market hours Monday that it's received formal notice that the investigation is concluded. The Department of Justice's (DoJ) U.S. Attorney's Office for the Western district of Pennsylvania said that no enforcement action WOULD be taken against the company.

Image source: Getty Images.

The investigation centered on fraud allegations, raised in a pair of short seller reports, that fraud was being committed at both the company and American Income Life, a subsidiary.

Compounding this win, not one but two analysts tracking Globe Life published new and positive research reports on its stock. Keefe, Bruyette & Woods' Ryan Krueger raised his price target on the shares, albeit slightly, to $160 per share from his preceding $155. In doing so, he maintained his outperform (buy) recommendation.

TD Cowen's Andrew Kligerman also weighed in with a positive take, reiterating his buy rating and $182 per share price target.

Focus on the fundamentals

I don't personally feel that investors should buy into Globe Life purely on the basis of the investigation's wrap-up. The company has done a decent job of growing both premiums and key fundamentals, and it should be considered on that basis, not on the status of its relationship with top regulators.