Axa: excessively discounted, Credit Suisse says
(CercleFinance.com) - Credit Suisse this morning confirms its buy rating ("outperform") on the share of the French insurer AXA, believing that the share is excessively discounted.
The broker maintains its target price at 28 euros, which suggests upside potential of over 25%.
Excluding the US life insurance subsidiary, which is partially listed on the stockmarket, (a priori) with the view to a sale, Credit Suisse calculates that AXA is trading at a 2020 P/E of around 7x. This does not seem to take into account the group's balanced business, of which over 50% of the profits will come from non-life and health insurance with the acquisition of XL Group. Consequently, this part of AXA is trading at a discount of about 20% to 30% relative to European and American peers, analysts calculate.
An event could resulting in a catalyst for the share: the investor day scheduled for 28 November, during which management should address investors' concerns about the strength of its balance sheet and XL Group in particular. Credit Suisse expects the announcement of the increase in the rate of distribution of earnings, along with commitments on the group's debt reduction.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The broker maintains its target price at 28 euros, which suggests upside potential of over 25%.
Excluding the US life insurance subsidiary, which is partially listed on the stockmarket, (a priori) with the view to a sale, Credit Suisse calculates that AXA is trading at a 2020 P/E of around 7x. This does not seem to take into account the group's balanced business, of which over 50% of the profits will come from non-life and health insurance with the acquisition of XL Group. Consequently, this part of AXA is trading at a discount of about 20% to 30% relative to European and American peers, analysts calculate.
An event could resulting in a catalyst for the share: the investor day scheduled for 28 November, during which management should address investors' concerns about the strength of its balance sheet and XL Group in particular. Credit Suisse expects the announcement of the increase in the rate of distribution of earnings, along with commitments on the group's debt reduction.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.