- Hiscox Limited (DI)
- 28 May 2026 12:42:30
Source: Sharecast
The broker, which remains positive long term, said the shares have enjoyed a strong performance, driven by healthy cash flows from the wholesale business, together with accelerating premium growth and better margins in retail.
"In addition, $200m of cost savings should continue to support margins into FY28E," Peel Hunt said.
It said the investment leverage of 2.7x and the circa 4% current yield further underpin returns, on top of healthy and diversified underwriting margins.
"We lower 2026E headline EPS by 1% (adjusted EPS -4%) and by 6% in FY27E (adjusted EPS -4%)," it said, adding that there is no major change in its estimates for FY26 NAV or DPS.
"Sustainable underwriting margins, combined with attractive insurance gearing, underpin solid mid-teens tangible returns on equity," it said.
The broker lifted its price target to 1,960p from 1,790p, which offers 8% potential upside from current levels. "This values HSX at 2.3x FY26E TNAV, for an average RoE of 17% in the next three years," it said.
At 1240 BST, the shares were down 1.6% at 1,776p.