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Investing.com - Morgan Stanley (NYSE:MS) upgraded Hiscox Ltd. (LSE:LON:HSX), a $5.7 billion market cap insurer with annual revenue of $3.8 billion, from Equalweight to Overweight on Wednesday, raising its price target to GBP14.60 from GBP12.80. According to InvestingPro data, the company maintains a "GOOD" overall financial health score.
The upgrade follows Hiscox’s recent Capital Markets Day, where the insurer provided clearer visibility on its growth trajectory for its Retail business, which represents approximately 50% of the company’s premiums.
Morgan Stanley highlighted several positive developments from the event, including Hiscox’s announcement of a $200 million efficiency program aimed at expanding margins, and management’s decision to rebase the ordinary dividend for the second time in 2025.
The firm also noted that Hiscox provided clarity on capital management, which could potentially allow for additional capital returns to shareholders. These factors addressed previous concerns about the company’s performance following what Morgan Stanley described as "a bumpy couple of years" for the Retail segment.
Hiscox shares currently trade at 8.4 times 2026 estimated adjusted operating P/E and 1.4 times 2025 estimated P/B, which Morgan Stanley considers "undemanding versus history." The firm expects future reporting days to serve as potential catalysts as management delivers updates on its strategic plan.
In other recent news, Hiscox Ltd. has been the subject of several upgrades from major financial firms. Goldman Sachs upgraded Hiscox’s stock rating to Buy, citing a balanced business mix and forecasting the highest top-line and EPS growth among its London Market peers from 2024 to 2028. Jefferies also upgraded Hiscox to Buy from Hold, following positive announcements during the company’s recent investor day, including a commitment to increase dividends and boost retail growth. Berenberg reinstated coverage with a Buy rating, highlighting the potential of Hiscox’s Retail business to become a significant contributor to the company’s performance. Hiscox’s recent capital markets day revealed a strategy for growth in the Retail division, which is expected to provide stability and profitability. The company anticipates $200 million in efficiency gains from 2028, stemming from an operational overhaul aimed at cost reduction. Hiscox plans to expand its margins in the small commercial and high-net-worth individual lines, which are seen as having significant growth potential. The company is also increasing investments in distribution and product development to support this strategy.
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