General, Barclays is not worth more than EUR 11,10 – Milano Finanza

Barclays today raised its target price on the stock General but only 11 to 11,10 euro and confirmed the equal-weight recommendation. The action at the time the stock market travel at 12,06 € (+ 0.84%). “The insurance company reported a better than expected set of results showing the benefits of the restructuring efforts of recent years”, says the report of the investment bank. However, “the environment continues to deteriorate and the business life in Europe needs to run faster to escape relegation.”

In general effects it reported strong operating profit in the second quarter to 1.3 billion Euros, 16% above the consensus estimate, mainly due to business P & C (combined ratio to 92.3%, better than the consensus estimates) and Life, partially offset by weak results of HoldCo & amp division; Other (loss 64 million compared to the expectations of the consensus that pointed to a gain), mainly due to weaker than expected result of Banca Generali and the lower contribution from the segment Other.

Barclays also indicates that the ratio of Solvency 2 General at 188% on a quarterly basis remained flat, however, beating the expectations of the consensus and its at 181%. “We have therefore increased our estimates by 7% for this year as a result of the better than expected performance from beginning of the year: the net profit is expected later this year to 2.157 billion euro from 2.030000000000 of 2015 with an expected dividend to 0.80 euro per share from EUR 0.72 per share in 2015. for the rest of the estimates increase on average by 1.5%, “they say the investment bank.

But as highlighted by the same management of Generali during the conference call on the results, it is necessary to intensify and accelerate the operational efforts to achieve what you wanted to do last year. “From a top-down perspective, we find it hard to see a compelling business Traditional life in Europe, despite all the successful actions taken by management,” explained the Barclays experts.

“With an operating result probably flat at best (at year-end is seen at 4.629 billion from 4.785 billion in 2015, editor’s note) and with the consensus estimates seem high, we maintain equal weight rating on the stock, despite the little darling evaluation “, adds Barclays analysts.

“Although Generali offers a 7.3% dividend yield in 2017, also in line with our major competitors, we consider Axa , on which we have an overweight rating and a target price 21 euro, and Zurich, on which we have an overweight rating and a target price of 278 Swiss francs, the most interesting for their business mix and / or their geographical presence, “conclude the analysts at Barclays.