Beazley (LON: BEZ) shares tumbled last week after the company released a trading update for the nine months that ended September 30, which revealed gross premiums written increased by 22%.
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The company’s stock fell over 7% following the report on Friday, although it gained 4% on Monday and is up over 34% in 2022.
It said in its release that mark-to-market losses have occurred due to rising yields in its fixed income portfolio, but rising yields mean it anticipates “significant future investment returns.”
On Monday, reacting to the report, HSBC analyst Faizan Lakhani upgraded Beazley to Buy from Hold, raising the firm’s price target on the stock to 750p from 670p. In a note to clients, Lakhani explained that Beazley showed “an unexpectedly very resilient underwriting performance” in the third quarter, while the company’s 2023 outlook “looks robust.”
The analyst added that he expects double-digit percentage top-line growth and for the combined ratio to be below 90%.
Elsewhere on Monday, Jefferies raised its price target on Beazley to 825p from 670p, maintaining a Buy rating, while RBC Capital also raised its price target on the stock to 775p from 675p per share, keeping an Outperform rating.
According to TipRanks, eight out of eight analysts have a Buy rating on Beazley shares, with the average price target of 750.25p representing a potential 19.61% upside from current levels.