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On Friday, UBS adjusted its stance on ASR Nederland NV (AS:ASRNL:NA) (OTC:ASRRF), downgrading the stock rating from Buy to Neutral while simultaneously increasing the price target to EUR60.00, up from the previous EUR54.00. The shift in rating by UBS reflects a reassessment of ASR’s position within the Dutch insurance market, with a noted preference for NN Group (AS:NN) among the firm’s coverage.
The UBS analyst cited several reasons for the downgrade, including ASR’s valuation, which is perceived as full both on an absolute and relative basis. Additionally, a sum-of-the-parts (SOTP) analysis based on peer and transaction multiples, as well as IFRS valuation metrics—though not crucial for Dutch stocks—were taken into account. The analyst also noted that ASR’s forecasted 8% FY26E and 11% operating capital generation/free cash flow (OCG/FCF) yield are fair and align with subsector averages.
The report further elaborated on the OCG/FCF yield, which at 11%, now falls below ASR’s internal return on investment hurdle rates. This suggests that a special share buyback is unlikely unless there is an Aegon (NYSE:AEG) placing. The analyst’s assessment reflects a comprehensive view of ASR’s financial metrics and market position.
Despite the downgrade, the increased price target from EUR54.00 to EUR60.00 indicates an expectation for some positive performance. However, the analyst’s outlook suggests that ASR’s current valuation leaves limited room for significant stock appreciation, leading to the neutral stance on the company’s shares.
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