Analysts at Berenberg slightly raised their target price on insurance firm Beazley from 720.0p to 750.0p on Monday, stating profitable growth looked set to accelerate.
Berenberg updated its forecasts on the stock to reflect Beazley’s £350.0m capital raise on 16 November and added that the firm’s rationale for growing its property franchise made “perfect sense” and that the timing was “fortuitous” given “very strong” momentum in its cyber business.
“In our view, this capital allocation decision is a bold statement about Beazley’s confidence in the outlook for its cyber business,” said Berenberg. “We think 2023E will involve a step-up in Beazley’s scale: we estimate the company will be 2.7x the size it was in 2017 in terms of net premiums.”
The German bank now forecasts net premium growth to accelerate “significantly” to 28.5% in 2023, up from 15% before.
“We estimate a circa 24% compound annual growth in net asset value per share between H122 and FY24E which, in our view, will be very difficult for other companies in the sector to match,” said Berenberg, which also reiterated its ‘buy’ rating on the stock. “This makes Beazley one of the most attractive profitable growth stories in insurance.”
Reporting by Iain Gilbert at Sharecast.com
