Talanx's shares surge: forecast enhanced - MDAX hits all-time high following exceptional first half
Talanx Surges: Robust Half-Year Results Boost Profits and Stock Price
The German insurance giant, Talanx, has seen a significant boost in its profits and stock price, following the release of its robust half-year results. On Thursday, Talanx Stock (WKN: TLX100) experienced a significant price increase of around eight percent.
The international business segment, which caters to private and small corporate clients, has been particularly strong. This segment's contribution to Talanx's result has surpassed that of the previously dominant reinsurance subsidiary, Hannover Rück. As a result, Talanx's net profit for 2020 has increased from 2 billion euros to an unexpectedly revised forecast of 2.3 billion euros.
The improved corporate outlook, supporting dividend growth potential, and Talanx's track record of exceeding targets have led analysts at Berenberg to raise their profit estimates. They also upgraded their forecast for dividend payout per share, emphasizing the stock’s attractive valuation as a key factor behind the surge. Berenberg maintained its "Buy" rating, with a price target raised from 125 to 138 euros.
Talanx's return on equity has improved significantly to 23.4 percent, while the combined ratio has improved to 90.7 percent. Insurance premiums for Talanx have also increased by five percent to 24.2 billion euros. After six months, Talanx has already booked 1.37 billion euros, a 26 percent increase from last year.
Despite losses of 624 million euros due to the wildfires in Los Angeles, overall, natural catastrophe and man-made losses remained below plan. The major loss budget of Talanx has a buffer of around 140 million euros. Talanx expects the return on equity to be stabilized at 18 percent by the end of the year.
The surge in Talanx's stock price is a testament to its strong fundamental position. With Talanx currently leading the MDAX, investors should keep an eye on the company as it maintains its momentum in the second half of the year. After the sell-off following the so-called Liberation Day in early April, Talanx stock is now demonstrating its potential.
[1] Source: Reuters [2] Source: Talanx AG Investor Relations
Investing in Talanx stock appears attractive, given its strong performance and rising valuation, as indicated by Berenberg's upgraded "Buy" rating and increased price target. The international business segment's significant contributions to Talanx's net profit, amid robust half-year results, underscore the company's success in diverse areas of finance, including business expansion.
