On Friday, Jefferies issued a new rating for Allianz (ETR:ALVG) SE (ALV:GR) (OTC: AZSEY), adjusting its stance from "Buy" to "Hold," while increasing the price target to €325 from the previous €310. The financial services firm acknowledged the insurance giant's growth plan, which aims for a 7%-9% compound annual growth rate (CAGR) in earnings per share (EPS), as a significant improvement over its last strategy.
The analyst from Jefferies expressed that the updated plan aligns with market expectations. The firm was also taken aback by another amendment to Allianz's capital return policy, which now includes a formalized share buyback payout. This development prompted Jefferies to revise its forecasts upward and adjust the price target accordingly, by 5%.
Despite the positive outlook on Allianz's ambitious plan and enhanced capital return policy, the decision to downgrade the rating to "Hold" comes as the consensus and share price have already recognized the company's strategic intentions.
Allianz's new plan, which surpasses its previous targets, aims to accelerate growth and deliver greater shareholder value. The formalization of the buyback payout as part of its capital return policy is designed to provide a clearer and more predictable return to investors.
With the market having already factored in Allianz's robust plan, Jefferies' updated rating and price target reflect the current sentiment and expectations surrounding the company's future performance. The insurance firm's strategic direction and policy changes have been well-received, as evidenced by the upward revision in forecasts and price target by Jefferies.
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