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Investing.com - RBC Capital upgraded Hiscox Ltd. (LSE:HSX) from Sector Perform to Outperform on Tuesday, while raising its price target to GBP16.00 from GBP14.00. The upgrade comes as Hiscox shares have shown strong momentum, gaining nearly 20% over the past six months and trading near their 52-week high of $18.00.
The upgrade reflects RBC’s view that Hiscox is "a much better diversified business than its peers," with its Retail operations comprising more than 50% of the business and forecast to grow more quickly than its London Market and Reinsurance segments. According to InvestingPro data, the company maintains strong fundamentals with a Good Financial Health score and revenue growth of 3.87% in the last twelve months.
RBC cited the narrowing of the multiple gap and strong results in the first half of 2025 as key factors behind the rating change, along with raised capital return expectations that have shifted the firm’s relative preference in Hiscox’s favor. InvestingPro analysis suggests the stock may be undervalued, with 8 additional key insights available to subscribers.
The research firm also noted that recent sector merger and acquisition activity has highlighted Hiscox’s potential as a takeover target, with shares currently trading at approximately 1.8 times trailing tangible net asset value.
RBC’s new price target of GBP16.00 is based on a valuation rolled forward to fiscal year 2026 estimates, representing significant upside potential for the insurance company’s shares.
In other recent news, Morgan Stanley upgraded Hiscox Ltd.’s stock rating from Equalweight to Overweight. This change comes after Hiscox’s recent Capital Markets Day, where the company offered more detailed insights into its growth plans for its Retail business. The Retail segment accounts for about half of the company’s premiums. Morgan Stanley also raised its price target for Hiscox from GBP12.80 to GBP14.60. These developments reflect a positive outlook for Hiscox’s growth trajectory.
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