FRANKFURT (dpa-AFX) - A buy recommendation from Swiss bank UBS gave Munich Re 's recently faltering share price performance some momentum on Wednesday. Nevertheless, the overall market was very weak in the middle of the week with the Dax expected to be more than one percent lower. The reinsurer's shares bucked the market trend in the morning on the Tradegate trading platform with an increase of 0.2 percent to 383.60 euros compared to the Xetra close.

UBS analyst Will Hardcastle upgraded the reinsurer's shares from "Neutral" to "Buy" and raised the price target from 376 to 440 euros. The reinsurer's annual target for the net result appears reasonable and could already include a buffer for expected interest rate cuts, the expert wrote. He believes that Munich Re can achieve an average increase in earnings per share of more than 13 percent over the next two years. The share is his preferred sector stock.

In mid-December, the world's largest reinsurer forecast a surplus of around five billion euros for 2024. This would be a significant increase compared to the EUR 4.5 billion that CEO Joachim Wenning had set for 2023.

Nevertheless, this did not provide any fresh impetus for the shares, which had been performing strongly until then. Shortly before the announcement of the profit target for 2024, the share price had risen to a record high of just over 400 euros. The strong run was driven by rising reinsurance prices and key interest rate hikes by major central banks. Higher interest rates are generally positive for insurers and their investments.

After the record high, speculation that key interest rates would soon be cut in the USA and the eurozone put pressure on the share price. Recently, however, central bankers dampened this speculation. Since the setback in mid-December, the Munich Re share price has fluctuated between around 374 and 385 euros./mis/men/stk