Canaccord ups target price on 'sell' rated Hiscox
Analysts at Canaccord Genuity kept their 'sell' rating on insurance provider Hiscox on Tuesday but upped their target price on the group from 1,580p to 1,600p after the firm's interim pre-tax profits came in slightly ahead of consensus.
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Hiscox Limited (DI)
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Insurance (non-life)
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With Hiscox's total pre-tax profits of $168m topping the company compiled consensus of $165m and Canaccord's own forecast of $151m, the Canadian broker slightly increased its gross written premium estimates for the firm but also took down its net premiums earned estimates for 2019.
Canaccord also nudged up its investment return predictions, but noted this was offset by the reduction in underwriting/net other profits.
"Overall, we raise our FY19E PBT by 1% to £274.4m and leave our DPS estimate at $0.44. All other PBT/DPS estimates are broadly unchanged," said Canaccord.
The analysts noted that Hiscox's first-half results were "clearly better" than they had predicted ahead of the group's warning, but said the figure's still reflected "the mixed trading for the group".
Canaccord also said it saw "huge opportunities" in the retail space and noted that it expects investor attention during the second half to shift onto said opportunities and pre-tax profit upsides for Hiscox in 2020.
"Although the group remains exposed to cat losses from its London Market and Re/ILS books, the retail business should provide it with some downside protection from non-correlating revenue/PBT.
"Against this, we still see the share price valuation as being up with events considering the H1 adjustments and the impact on the FY ROE and P/TNAV."