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On Tuesday, Citi updated its financial model for Swiss Re (SIX:SRENH) (SREN:SW) (OTC:SSREY), leading to an increase in the price target from CHF165.00 to CHF169.80, while retaining a Buy rating on the shares. The revision follows the company’s first-quarter earnings, which Citi analyst James Shuck found supportive of Swiss Re’s improving outlook and strong underlying profitability.
Shuck raised the 2025 net income estimate for Swiss Re to $4,878 million, a 3% increase from previous estimates. This figure surpasses the group’s target of over $4.4 billion and is 8% higher than the current consensus. The adjustment takes into account factors such as a weak US dollar and positive prior year development (PYD) in Property & Casualty Reinsurance (P&C Re). Shuck also noted that Citi’s estimates for the P&C Re combined ratio (COR) remain more optimistic than consensus in each year.
For the years 2026 and 2027, the US dollar estimates for Swiss Re remain largely unchanged. However, due to the strength of the Swiss franc against the US dollar, the estimated earnings per share (EPS) in Swiss francs are expected to decrease by 3%, 9%, and 10% for the years 2025 to 2027, respectively.
The increase in the price target to CHF169.80 is driven by a lower cost of equity (COE) load for uncertainty and a solid track record. Despite the adjustment, the expected total return (ETR) stands at 19%. Shuck reiterated the Buy recommendation for Swiss Re stock but noted that with less upside potential, the company has been removed from the Citi European Focus List.
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