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PZU insurer rewarded with a “buy”recommendation following an impressive performance


Large-cap insurer PZU enjoyed a recommendation upgrade to 'buy' from 'hold' with target price hiked to PLN 51.7 from PLN 40, Trigon brokerage said in a report.

PZU's 2017 results may surprise positively thanks to the much stronger-than-expected impact of vehicle insurance price hikes, with net profit seen soaring 68% y/y to nearly PLN 3.3 bln, Trigon analysts estimate.

The brokerage's new report also takes into account the full consolidation of bank Pekao's results with PZU's results as of Q3. The takeover is expected to boost the insurer's profit by some PLN 230 mln in 2017 and some PLN 350 mln in 2018.

"We treat this year's low dividend as a one-off related to the Pekao takeover, with the company likely returning to its policy of handing over 80% of its net earnings to shareholders, which would translate into an attractive dividend yield of nearly 7%," Trigon analysts add.

PZU shares were trading at PLN 44.81 at 10:18 local time.


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