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Investing.com - Goldman Sachs downgraded Zurich Insurance Group AG (SIX:ZURN) (OTC:ZURVY) from Neutral to Sell on Wednesday, while lowering its price target to CHF542.00 from CHF562.00.
The downgrade comes as Zurich’s price-to-earnings ratio is trading at the 98th percentile versus its historical levels, creating what Goldman Sachs describes as "a high valuation bar" for the multi-line insurance company.
Goldman Sachs noted this valuation is among the highest across multi-line insurers, particularly concerning for a company with significant earnings contribution from commercial property and casualty insurance where the firm sees "some downside risks."
The research firm pointed out that Zurich’s commercial property and casualty book is overweight in the U.S. market, where industry-level pricing has shown moderation, albeit with variations across different insurance lines.
While Zurich reported positive rate growth in the first quarter of 2025, supported by commercial auto, middle-market and specialty segments, Goldman Sachs expressed concern that competitors targeting these same segments could create "some margin risk" for the insurer.
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