* Cuts price target to C$15 from C$22
* Bullish on Asian franchise, skeptical on US
Nov 22 (Reuters) - Citigroup downgraded Manulife Financial Corp (MFC.TO) by two notches to "sell," citing weak outlook for its U.S. operation and the risk of dilution from further equity issuance.
Canada's largest insurer, which owns U.S.-based John Hancock, has a high level of uncertainty around future earnings progression and capitalization, Citigroup said.
"While we remain very bullish about the Asian franchise with its above average growth potential and continue to expect solid sustainable gains from the domestic Canadian business, the outlook for the U.S. John Hancock operations is a very different matter," the brokerage said in a note to clients.
The brokerage expressed confidence in Manulife's new CEO Don Guloien, but said the pace of the turnaround and the final outcome in terms of return on equity has considerable risks.
On Nov. 4, Manulife reported a fivefold increase in its third-quarter loss due to C$3 billion in charges and a writedown, but the company's shares rose 10 percent as the loss was not as big as expected. [ID:nN04213369]
The Toronto-based company's shares were trading down 3 percent at C$14.87 on Monday on the Toronto Stock Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Don Sebastian) (email@example.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: firstname.lastname@example.org))