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Investing.com -- Barclays (LON:BARC) has upgraded Mapfre (BME:MAP) to “equal weight” from “underweight,” citing early signs of margin recovery in Iberia, particularly in motor insurance, in a note dated Tuesday.
Shares of the Spanish insurance company were up 3.2% at 04:27 ET (09:27 GMT).
Analysts also raised their price target to €3.50 from €2.30, a 52% increase (Barclays Research, 24 June 2025).
In Iberia, pricing has lagged inflation, eroding margins, especially in motor. However, recent data indicate improvement.
In Q1 2025, Mapfre reported a 7 percentage point improvement in its motor combined ratio (COR).
Barclays now forecasts Iberia’s COR at 95.8% for 2025 and 95% for 2026, approaching the group’s target of 94-95%.
Outside Iberia, Brazil remains a key contributor. Following a 25 basis point hike in the SELIC rate to 15% on June 18, 2025, Barclays expects sustained investment income from Brazil throughout the year.
This supports stronger earnings and stabilizes returns despite macroeconomic uncertainty.
Barclays has lowered its cost of equity assumption for Mapfre to 11% from 12.5% to reflect improving business conditions.
The brokerage also forecasts a dividend per share of €0.18 in 2025, aligning with Mapfre’s 50% payout policy, resulting in an estimated dividend yield of 5.5%.
Financial metrics indicate solid growth. Barclays estimates EPS will rise from €0.29 in 2024 to €0.37 in 2025, with projected EPS of €0.39 in 2026 and €0.41 in 2027.
The P/E ratio is expected to fall from 11.3 in 2024 to 9 in 2025 and 8.6 in 2026. Return on equity is forecasted to increase from 13% in 2024 to 15.2% in 2025, while book value per share is projected to rise from €2.76 in 2024 to €2.96 in 2025.
Mapfre’s Iberia segment contributed 28% of group gross written premiums in 2024 but its profit contribution has halved since 2018.
The company’s global diversification exposes it to currency fluctuations and economic risks across its markets.
In North America, profitability remains dampened due to regulatory changes. Barclays notes these ongoing risks limit potential upside beyond the current price target.
Shares closed at €3.32 on June 20, 2025, near the new target. The 52-week range stands between €2.06 and €3.51.
While recent share price gains have been driven by strong performance in Brazil and Latin America, Barclays believes Iberia’s motor recovery now adds further support.