European Insurance: JPM keeps positive view on stronger fundamentals

Grupo Catalana Occidente SA

06/04/2021 10:37

** J.P. Morgan sees European insurance sector delivering
strong results from a cash, capital and earnings perspective
with the potential rise of the interest rates lending further
upside; selects Poste Italiane  PST.MI  as its top pick
    ** It considers capital as the most important driver for
insurers and believes there is room for the sector's Solvency II
Ratio further improvment to 211% on rising interest rates
    ** The brokerage views the sector's dividend yield of 5-6%
as robust and estimates normalised free cash flow yield of about
9% as attractive
    ** It notes the insurance sector has outperformed the EU
markets by 4% year-to-date and still trades at a 38% discount to
European markets versus the past 10-year average discount of 28%
    ** JMP highlights Poste Italiane, NN Group  NN.AS , Ageas
 AGES.BR , AXA  AXAF.PA , Hannover Rueck  HNRGn.DE , M&G  MNG.L 
and Allianz  ALVG.DE  as the best investment ideas and rate all
the stocks as "overweight" 
    ** It double-upgrades Mapfre  MAP.MC  to "overweight,"
saying the stock is cheap at current valuation levels, while the
company's Iberian and Brazilian businesses are doing well
    ** At the same time it turns "neutral" on Catalana  GCO.MC 
seeing no further upside with positives already priced in
following the stock's re-rating

 ((Elizaveta.Zhuravleva@thomsonreuters.com;))