FRANKFURT (dpa-AFX) - The dark clouds on the horizon are disappearing in the European insurance sector. This is the conclusion reached by the experts at Deutsche Bank Research on Wednesday in a sector outlook for 2024. The team of analysts led by Hadley Cohen raised the price targets for numerous stocks, and in some cases investment ratings were also revised upwards.
In the expectation that bond yields have peaked and the outlook for credit spreads remains subdued, the experts positively highlighted price increases in the property and casualty sector. Together with more resilient balance sheets, this is the right environment for European insurers to achieve above-average share price performance again in 2024 after an average year.
In this context, the experts describe those stocks as "top picks" that have recently lagged behind their industry peers in terms of share price, but whose business is gaining momentum. ASR, Direct Line and Legal & General were mentioned in this context. Axa and Scor with revaluation potential were also mentioned. They least favored the shares of Generali, Phoenix Group and Sampo.
There were various reclassifications in the study: In addition to the favorites Direct Line and Legal & General, the M&G shares were also freshly recommended as a buy. In contrast, the experts downgraded Aviva to "Hold". In recent years, the share had made the strongest gains among British life insurers, but now the air is largely out, they wrote.
Among the German stocks, Allianz remains a "buy" in times when large investments are necessary and in view of the expected consolidation. This is also a central argument for counting Axa among the favorites. The reinsurers Munich Re and Hannover Re are still rated "Hold" and "Buy" respectively, but the price target for both was raised slightly to 370 and 230 euros.
With a "Buy" rating, Deutsche Bank recommends buying the respective shares on the basis of the expected total return for the next twelve months. With a "hold" rating, neither a buy nor a sell is recommended./tih/ck/jha/
Analyzing institute Deutsche Bank.
Publication of the original study: 29.11.2023 / time not specified in study / GMT
First dissemination of the original study: 29.11.2023 / 04:32 / GMT