Berenberg has increased its price target on Baloise Holding AG (BALN: SW) (OTC: BLHEF) shares, citing the company's strategic refocusing.
The new target is set at CHF172.50, up from the previous CHF153.00, while the Hold rating remains unchanged.
Baloise Holding AG recently revealed a comprehensive plan for the years 2025 to 2027 during its capital markets day on September 12, 2023. The company aims to streamline its operations, which includes ceasing investments in ecosystems.
Additionally, Baloise plans to decrease its non-life expense ratio by 2-3 percentage points and boost its return on equity (ROE) to a target range of 12-15%. The company also anticipates increasing its cash remittances from approximately CHF2 billion in its 2022-24 plan to over CHF2 billion in the 2025-27 period, not accounting for one-off capital reallocations.
Berenberg noted that Baloise's shift from prioritizing customer acquisitions through investments in ecosystems related to home and motor insurance, to a renewed emphasis on cash generation and profitability, could pave the way for the adoption of additional measures in the future. The firm believes that the new direction presents a range of appealing options for Baloise.
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