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Investing.com -- BofA Securities has downgraded ASR Nederland to “neutral” from “buy,” citing limited upside potential after a sharp rally in the stock this year. 

The brokerage lifted its price objective to €63 from €61 but said the valuation has now caught up with peers, leaving little room for further surprises.

ASR shares have risen 35% in 2025, including a 10% gain since July, outpacing the sector by 12%.

At the new price objective, the stock offers about 6% total return, which analysts said is roughly in line with the industry average. The stock closed at €61.08 on August 20, just below the revised target.

The downgrade comes even as the insurer continues to report strong capital and operating results. 

ASR’s Solvency II ratio stood at 203% in the first half of 2025, above expectations, and analysts forecast it will climb to 222% by 2026. 

Operating capital generation reached €721 million in the first half, beating consensus by 4%, driven mainly by the life insurance segment.

Despite those gains, analysts said the outlook for excess capital returns is increasingly anticipated by the market, reducing the chance for upside surprises.

Earnings guidance remains solid. Management expects operating capital generation to exceed the €1.35 billion 2026 target, while BofA forecasts €1.42 billion. 

Still, reported net profit in the first half was weaker than expected at €130 million, compared with consensus of €500 million, due to market volatility and a revaluation of Aegon’s book following its acquisition.

“ASR is a high-quality business, and we continue to see upside to capital return, but valuation has caught up (9x P/OCG, 7.8% total yield) and room to surprise becomes more limited,” the brokerage said. 

Investing.com -- Goldman Sachs has turned more selective on European insurance stocks following a strong year of performance that lifted the sector’s PE ratio to the 95th percentile of its 20-year range. 

In a note dated Wednesday, analysts outlined a preference for companies trading at historically lower valuations, particularly those with retail P&C exposure and limited USD risk.

The report categorizes stocks into three valuation groups based on their current PE relative to historical levels: PE Cheap (below 50th percentile), PE Mid (50–75%), and PE Expensive (above 75%). 

“Buy” ratings are concentrated in the PE Cheap category, with five of six names receiving positive recommendations. 

These include upgrades for NN Group (AS:NN) and Admiral. NN’s €61 target reflects its 2026 operating capital generation yield of 14%, a 9.3% estimated capital return, and 7–8% annual OCG per-share growth through 2028.

Admiral’s 3,573p target factors in rising U.K. motor prices and a strong position in price comparison channels, with earnings forecasts 11% above consensus.

SCOR, Beazley, and Lancashire also received Buy ratings despite exposure to commercial P&C and P&C reinsurance, as Goldman sees valuation more than compensating for business mix risks. 

Phoenix remains a “sell” due to high leverage and declining shareholder equity despite being in the PE Cheap group.

Among PE Mid names, Hiscox (LON:HSX) was upgraded to Buy based on its 50% retail earnings mix and strongest projected EPS and top-line growth among London Market peers. 

Hannover Re (OTC:HVRRY) and M&G were also rated “buy,” with M&G offering capital-light exposure and limited FX risk. 

L&G was downgraded to Neutral on concerns over capital return sustainability and annuity market competition.

In the PE Expensive group, Zurich was downgraded to Sell. The stock trades at the 98th PE percentile, with earnings skewed toward commercial P&C in the US, where margins face pressure. Its CHF542 price target implies 2% downside. 

ASR was downgraded to Neutral after a 27% rally, and Mandatum and Sampo remain Sells despite strong retail exposure, due to low or declining capital return yield projections.

Goldman’s ratings now show a clear tilt toward small and mid-cap names, with 7 of 9 “buys” fitting this profile. 

The brokerage’s valuation framework centers on 2026E price-to-adjusted tangible book value (P/ATBV), adjusted for return on ATBV, earnings growth, and excess capital.

Sector-wide, European insurance has outperformed the Stoxx 600 by 21% over the past 12 months. 

Dividend yields, while more aligned with historical norms, remain a key support. Still, with an uncertain macro backdrop and elevated sector valuations, Goldman prefers a selective, value-oriented approach focusing on earnings resilience and capital deployment.

Investing.com -- J.P. Morgan analysts have upgraded NN Group (AS:NN) to "overweight" from "neutral," raising its price target to €70 from €52. 

This follows the company’s recent Capital Markets Day, which revealed a more diversified and strong growth outlook than previously expected.

In a concurrent move, ASR Nederland N.V. was downgraded to "neutral" from "overweight."

The upgrade reflects NN Group’s improved earnings potential and valuation compared to ASR. 

Analysts project that NN Group will narrow its price-to-earnings and free cash flow yield gap with ASR in the coming years. 

Earnings per share estimates for NN Group have been raised by 4% to 10% for 2025-2028, driven by growth across multiple business units, especially in Japan. 

There, a significant turnaround in new business profit growth is expected, aided by the potential lifting of a “regulatory improvement order” and the introduction of new products.

NN Group’s business mix is set to become more diversified, reducing its reliance on the lower-growth Netherlands Life division. 

By 2028, analysts forecast that over 50% of NN Group’s earnings will come from other units, including its European and Japanese operations.

Europe is expected to maintain its solid track record in protection and savings policies, while Japan is poised for a substantial recovery in new business profits.

In contrast, ASR’s growth is primarily driven by acquisition synergies and remains largely dependent on the Dutch life market, which has lower growth prospects.

Analysts at J.P. Morgan expect NN Group’s diversified business mix to generate more consistent and higher long-term growth compared to ASR’s more concentrated operations.

Additionally, J.P. Morgan analysts project a stronger balance sheet for NN Group, paving the way for a progressive share buyback program starting in 2026. 

NN Group’s ability to generate improved capital, coupled with a softening of Solvency II sensitivity to Dutch mortgages, gives the company confidence in increasing its share buyback to €350 million annually by 2026.

This amount would rise by €50 million each subsequent year, further enhancing shareholder returns.

J.P. Morgan’s projections for NN Group’s earnings and operational capital generation are above consensus.

The brokerage expects operating profit for 2025-2028 to exceed consensus by 3% to 7%, thanks to stronger growth expectations for its European and Japanese life divisions. 

Analysts also forecast NN Group will surpass its OCG target of €2.2 billion by 2028, reaching €2.3 billion, driven by improved margins in its non-life business and stronger OCG growth in Japan.

Currently, NN Group trades at approximately 7x its estimated 2026 P/E, compared to ASR’s 9.5x. 

Additionally, NN Group is expected to deliver a higher OCG yield of approximately 13.5% for 2026, compared to ASR’s 11.5%. 

Given these factors, J.P. Morgan analysts believe the discount applied to NN Group’s valuation is no longer justified, as the brokerage’s more diversified business mix, stronger balance sheet, and improved growth prospects in Europe and Japan position it for stronger future performance. 

By 2027, NN Group is expected to offer an approximate 10% total capital return yield.