Citi ups Tryg to 'buy' seeing limited risk

Tryg A/S

12/07/2023 10:30

** Citi upgrades Danish insurer Tryg  TRYG.CO  to "buy" from
"neutral," citing attractive valuation and limited downside risk
    ** Despite numerous FX headwinds, claims inflation, and
higher reinsurance costs, Tryg still managed to beat consensus
on its underlying claims ratio at a 60bps improvement
year-on-year, it points out
    ** In its view the insurer's Q2 results on Tuesday were
followed by a sharp negative share price overreaction
    ** The results and commentary did not have a material impact
on 2024 earnings estimates and guidance relative to where
consensus was already, the brokerage says 
   ** Citi sees scope for Tryg to positively surprise on its
underlying claims ratio as headwinds from higher travel claims
should reduce in Q3
    ** Claims and procurement synergies, which currently account
for 40bps, should continue and potentially increase slightly, it
says
    ** The brokerage adds Tryg has sufficient levers to continue
to demonstrate adequate underlying margin improvement  
    ** It expects Tryg's 2024 technical result to be towards the
top end of the company's DKK 7.2-7.6 billion target range 
    ** Out 14 of analysts that cover the Tryg stock, nine rate
it "strong buy" or "buy", four rate "hold", and one rates "sell"


 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))