Generali: UBS downgrades buy rating

(CercleFinance.com) - This morning UBS downgraded its buy rating on the share of the Italian insurer Generali, now adopting a neutral stance.


The broker has cut its 12-month target price from 16 euros to 14.5 euros, with the share currently trading at slightly over 15 euros in Milan.

The main argument developed by analysts concerns the capacity of the Trieste Group to meet its financial commitments by 2021, which UBS says is highly dependent on maintaining a solvency ratio of over 180%.

However, Generali appears to have the highest exposure to BBB- rated bonds that we cover, UBS believes - particularly in terms of government bonds - but also corporate bonds. According to UBS, this "structural" exposure constitutes a risk in the event of a downgrade in credit ratings, which could result from the economic downturn. Ultimately this would impact the group's solvency ratio.



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