On Tuesday, CFRA maintained a Buy rating on Assicurazioni Generali (BIT:GASI) SpA (G:IM) (OTC: ARZGY) and increased the price target for the shares from EUR25.00 to EUR27.00.
The firm cited the insurer's solid first-quarter performance and an improved return on equity (ROE) as the basis for the upgraded target.
Generali's operating profit for the first quarter of 2024 saw a year-over-year increase of 5.5%, reaching EUR1.9 billion, which aligned with consensus estimates. This growth was attributed to positive results across all business segments.
Notably, gross written premiums surged by 21.4% compared to the previous year, totaling EUR26.4 billion. This significant growth was fueled by positive developments in both the Life and Property & Casualty (P&C) sectors, with Life net inflows returning to positive levels.
The firm's diversified insurance and asset management model, coupled with a robust capital position, has enabled Generali to reaffirm its strategy targets for 2024.
Analysts believe that Generali's commitment to matching increased shareholder remuneration prospects will be well-received by investors, positioning the company favorably among major multiline insurers.
Further optimism is expressed regarding Generali's ability to surpass its cash and capital targets outlined in the Lifetime Partner 24 strategic plan. This confidence is rooted in the company's strong performance in the P&C segment.
The new price target reflects a price-to-book (P/B) ratio of 1.45x for the year 2024, which represents a premium over the five-year average P/B ratio of 1.1x. This premium is justified by Generali's enhanced ROE, according to the firm.
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