Lancashire Holdings rises after Citigroup says market overestimated losses

Nextensa NV

01/04/2022 11:12

** Shares of British insurer  LRE.L  rise 5% to 453.8p after
Citigroup upgrades to "buy" from "neutral"
    ** Stock top gainer on the UK mid-cap index  .FTMC 
    ** Brokerage says LRE significantly de-rated on a 3 month
and 1 year view due to concerns over co's exposure to natural
catastrophes and more recently to the Ukraine conflict
    ** However, Citigroup estimates the market has overestimated
the losses LRE will face due to the Russia-Ukraine conflict by
at least 58%
    ** "We think the actual losses will come in materially below
as we show a less severe stress scenario of $155 million of
losses (-58% vs. market implied)" - Citigroup
    ** Adds that LRE is focusing on less capital intensive lines
of business which should lead to "more balanced book" with lower
earnings volatility
    ** 13 brokerages rate the stock "buy" or higher, 6 "hold"
and 1 "sell" or lower; their median PT is 620p
    ** LRE down 14% YTD

 (Reporting by Aniruddha Ghosh in Bengaluru)
 ((Aniruddha.Ghosh@thomsonreuters.com; 91 83 83 81 2416;))