Street Calls of the Week
Investing.com - Jefferies has upgraded Star Health & Allied Insurance (STARHEAL:IN) from Hold to Buy, while raising its price target to INR650.00 from INR490.00.
The upgrade comes as Jefferies views Star Health, the market leader in retail health insurance, to be "at the cusp of turnaround" following a period of derating during fiscal year 2025 due to worsening loss ratios.
Currently, the stock trades at 17x December 2027 estimated IFRS earnings per share, according to Jefferies analyst Supratim Datta, who has taken over coverage of the company.
Jefferies forecasts Star Health’s IGAAP profit after tax to grow at a 25% compound annual growth rate over FY25-28, driven by channel diversification, loss ratio improvement, and operating efficiencies.
The new price target values Star Health at an implied 23x December 2027 estimated IFRS earnings per share, with Jefferies noting this valuation takes into account loss ratio cyclicity and slower growth.
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