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Investing.com - Barclays (LON:BARC) upgraded Mapfre SA (LON:0NQ2) (MAP:SM) (OTC:MPFRY) to Equalweight from Underweight on Tuesday, raising its price target to EUR3.50 from EUR2.30.
The upgrade comes as Mapfre (BME:MAP) shows early signs of margin improvement in its Property & Casualty (P&C) business in Iberia, particularly in the motor insurance segment. Barclays cited the Spanish insurance market’s different position in the pricing cycle compared to other European countries.
While most European markets already have pricing comfortably above loss cost trends, Spain is still in an acceleration phase, with Mapfre and competitors indicating double-digit price increases are still needed. This pricing environment suggests further margin improvements are on the horizon for the Spanish insurer.
Barclays has increased its estimates for Mapfre’s Combined Operating Ratio (COR) in Iberia, now expecting 95.8% in 2025 and 95.0% in 2026. A lower COR indicates better profitability for insurance operations.
The firm believes that while the market has partially priced in Mapfre’s recovery, "the full extent of the opportunity has yet to be captured by the market," suggesting potential upside remains for the Spanish insurer’s shares.
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