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Investing.com - BofA Securities upgraded Storebrand (OTC:SREDY) from Underperform to Neutral on Thursday, while raising its price target to NOK165.00 from NOK135.00. The upgrade comes as the stock trades near its 52-week high, with an impressive 53.6% return over the past six months. According to InvestingPro data, Storebrand maintains a "GREAT" financial health score of 3.09.
The upgrade reflects BofA’s assessment that Storebrand’s operating environment has improved significantly, with better conditions in P&C/Disability insurance, stronger buffers in back books to help manage market volatility, and increased excess capital.
BofA forecasts Storebrand will report a net profit of NOK1,128 million for the third quarter of 2025, with operating profit remaining flat year-over-year. The firm expects the non-life segment to continue improving, helped by limited weather events during the period.
For the non-life segment specifically, BofA projects a combined ratio of 90.1% with substantial top-line growth continuing. The firm anticipates markets will provide a small tailwind for Storebrand’s Savings segment, while modeling minor pressure in the Holding segment due to short-term interest rate reductions.
BofA also decreased its cost of equity estimate for Storebrand to approximately 13% from 13.7%, contributing to the increased price target and reflecting higher expectations for share buybacks.
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