On Friday, Morgan Stanley (NYSE:MS) upgraded Scor (EPA:SCOR) SE (SCR:FP) (OTC: SCRYY), a global reinsurance company, from Equalweight to Overweight, adjusting the price target to €29.00 from €25.00. The firm's decision to upgrade the stock comes after a period of underperformance relative to its peers, which has seen Scor's shares trading at a significant discount.
The reinsurance company's stock experienced a notable decline following mid-year results, which were marred by negative revisions to the Life & Health (L&H) reserves. However, by the third quarter of 2024, Scor had completed a review of these reserves. Management's efforts to address potential arbitration impacts on the company's solvency ratio also yielded better-than-expected outcomes.
Morgan Stanley's analyst noted that as Scor SE continues to execute its strategic plans and receives validation from external reviews of its portfolio, the firm anticipates a positive re-rating of the company's shares. The new price target suggests a 22% upside from the current levels, reflecting confidence in the company's ability to recover and progress.
The upgrade comes at a time when investor confidence had been shaken due to a history of negative surprises from Scor. However, the recent developments and management actions are seen as steps in the right direction, which could potentially restore investor trust and lead to a more favorable valuation of Scor's stock in the market.
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