Analysts’ recommendations for PZU stocks

In 2018, PZU stock recommendations were issued by 12 domestic and international financial institutions in total. In total, sell-side analysts issued 16 recommendations, with 75% of them being positive.

At the end of 2018, PZU had 11 current recommendations (6 buy, 3 overweight and 2 sell). In 2018 “buy” recommendations were prevalent. In contrast with 2017, no “sell” recommendation was issued.

The median target price in the valid recommendations as at 31 December 2018 was PLN 49.5 (down 3.1% y/y, or 2.1% if consideration is given to cutting off the dividend in September 2018). The average target price was 11.4% higher than the share price at the end of 2018 (at the end of 2017 the deviation was 16.0%).

Statistics related to the recommendations issued in 2018

Price variance of the recommendations in 2018

In 2018 analysts issuing recommendations for PZU’s shares devoted considerable space in their publications to the situation on the motor insurance market in light of rising price pressure, the development of case law regarding general damages, in particular when it comes to people in a vegetative state and as a consequence of the possible profitability erosion in this insurance segment. The potential risks and threats posed to the high margin business model in group and individually continued insurance and the assessment of the impact exerted by financial market volatility on the Group’s investment performance

were an equally important topic. A material issue raised especially in H1 2018 was the impact of possible Pekao and Alior Bank merger on the PZU Group’s business and results.

In 2018 PZU’s average target share price according to analysts oscillated around PLN 49, implying 35% share price upside. At yearend 2018, the upside narrowed to roughly 11%; at the end of December 2018 the PZU share price was PLN 43.90, while the average target price was PLN 48.90.

In H1 2018 analysts issued recommendations with a wide range of target prices. In H2 the range between maximum and minimum target price started to dwindle, due to the structural evolution in analyst recommendations from neutral to overweight. In the final quarter of 2018 the minimum target price was higher than the share price. At the closing of the final session in 2018, the minimum target price was already 2.1% below the share price.

Target prices for PZU stocks, based on recommendations valid at the end of December 2018

Źródło: dane PZU

Institutions issuing recommendations for PZU’s stock (as at 31 December 2018)

In 2018 PZU had analyst coverage by Deutsche Bank. Due to changes in the structure of the research team, as of 29 August 2018 this bank ceased to issue recommendations for PZU stocks.

On 18 January 2019 Haitong Bank reinitiated coverage of PZU.