Scor: in free fall after profit warning
(CercleFinance.com) - Scor shares have collapsed 25% on Tuesday, under the weight of a very big profit warning in life reinsurance (L&H), according to Oddo BHF, given the actions taken on reserves and an experience gap that continues to be negative.
Thus, for L&H business in Q2, earnings from insurance activities are expected to be around -E0.4bn, and the margin on contractual services, before tax and at current yield curves, is adjusted by around -E0.9bn.
Scor also warned that further negative adjustments could occur between now and the end of the year, and that its economic value growth target of 9% p.a. at constant economic assumptions is unlikely to be achieved in 2024.
Following this profit warning, Oddo BHF has lowered its Q2 and 2024 earnings estimates, as well as its target price from E36 to E28, but is maintaining its 'outperform' rating on the reinsurer's stock.
Beyond the strong negative reaction in the short term, we believe that Scor, having recovered its profitability in property-casualty reinsurance over the past 18 months, should succeed in gradually improving its profitability in life reinsurance, it says.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
Thus, for L&H business in Q2, earnings from insurance activities are expected to be around -E0.4bn, and the margin on contractual services, before tax and at current yield curves, is adjusted by around -E0.9bn.
Scor also warned that further negative adjustments could occur between now and the end of the year, and that its economic value growth target of 9% p.a. at constant economic assumptions is unlikely to be achieved in 2024.
Following this profit warning, Oddo BHF has lowered its Q2 and 2024 earnings estimates, as well as its target price from E36 to E28, but is maintaining its 'outperform' rating on the reinsurer's stock.
Beyond the strong negative reaction in the short term, we believe that Scor, having recovered its profitability in property-casualty reinsurance over the past 18 months, should succeed in gradually improving its profitability in life reinsurance, it says.
Copyright (c) 2024 CercleFinance.com. All rights reserved.