Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com -- UBS has upgraded Uniqa Insurance Group AG (VIE:UNIQ) to a “neutral” rating, raising its price target to €11.6 from €9 per share, in a note dated Monday.
The upgrade follows several key factors, including robust first-quarter 2025 performance, management’s actions to address previous concerns, and the appreciation of its stake in Strabag.
Uniqa’s first-quarter results exceeded expectations, with a 13% year-on-year growth in Gross Written Premiums (GWP), outperforming its earlier guidance.
UBS now expects Uniqa to achieve a 7% CAGR for both GWP and EPS, higher than the company’s previous targets of 5% and 6%, respectively.
Management has also indicated that they may revise these targets upward when they report second-quarter results on August 22. The potential for target upgrades is seen as a key positive catalyst.
In response to concerns about leverage and solvency, Uniqa has taken several corrective actions.
The company redeemed €200 million in subordinated debt, reducing its leverage ratio to an estimated 34% by year-end 2025, down from 38% in 2024.
This brings Uniqa’s leverage closer to its informal target of 35%, though it remains higher than some peers.
Additionally, improvements in solvency modeling have reduced the company’s sensitivity to interest rate movements and government bond spreads, easing previous worries.
Uniqa’s stake in Strabag, a listed Austrian construction company, has surged by approximately 90% in 2025, contributing to a substantial increase in Uniqa’s market capitalization.
This appreciation has further boosted Uniqa’s valuation, adding around €0.6 billion to the company’s value, or 17% of its market cap.
Despite these positive developments, UBS maintains its preference for Vienna Insurance Group (VIG) due to VIG’s lower risk profile, higher growth potential, and stronger financial position.
While Uniqa’s growth outlook has improved, it still screens as more expensive than VIG in terms of valuation metrics, including price-to-earnings (P/E) and price-to-book (P/B) ratios.
UBS has revised its EPS forecasts for Uniqa upwards by 3%, 2%, and 5% for 2025, 2026, and 2027, respectively.
The reduction in Uniqa’s cost of equity, which dropped from 13.6% to 12.8% due to improvements in leverage and solvency sensitivity, has also contributed to the raised price target.
UBS forecasts a 5.4% dividend yield, supported by a payout ratio of 50% and a return on equity (RoE) of 20% in 2025.
At its new price target, Uniqa is trading at a 9.2x 2026E P/E, slightly below the sector’s 10.5x multiple.
The company’s share price has appreciated significantly in 2025, driven largely by the Strabag stake, though it has underperformed relative to VIG on a standalone basis.