RBC Capital Markets raises target price on Beazley

RBC Capital Markets lowered its full-year earnings estimates for Beazley by 40%, primarily assuming further investment MTM losses of $120.0m. However, for outer years, it increased its estimates by around 3% - assuming a modest pick-up in running yields and saying it sees an upside to its estimates here.

"We assume a $100.0m impact from Hurricane Ian, equivalent to just under a 20 basis point loss share on a $55.0bn industry total. We expect BEZ to meet its high-80s FY guidance, having upgraded it at the 1H, helped by the continued outperformance in Cyber," said RBC.

The Canadian bank added that Beazley remains its "top pick" in the specialty (re)insurance space, where it sees the highest cross-cycle book value compounding potential.

Reporting by Iain Gilbert at Sharecast.com