Kepler Cheuvreux has reduced its recommendation on Uniqa Insurance Group to "hold" from "buy", even as it lifted the firm's price objective to €17 from €16.50. The move reflects a reappraisal of valuation after Uniqa's shares climbed above Kepler's updated target, rather than any weakening in the insurer's underlying performance.
Analyst Thomas Neuhold framed the rating change as valuation-driven, saying Kepler sees "no immediate positive surprise potential for UNIQA" that would meaningfully raise earnings estimates or support further multiple expansion.
At the same time, Kepler increased its adjusted earnings-per-share projections for the 2026-2028 period by 3%-4%. Those upward revisions are underpinned by stronger insurance revenue assumptions following Uniqa's first-quarter 2026 results and by improved expectations for investment income in a higher interest-rate environment.
The brokerage now models adjusted EPS of €1.46 in 2026, €1.57 in 2027 and €1.70 in 2028. Uniqa's reported first-quarter insurance revenue was €1.9 billion, a 7% year-on-year rise, while EPS improved 7% to €0.42. The company also reaffirmed its 2026 pre-tax profit target at €540 million to €570 million.
Kepler revised the valuation inputs it applies to Uniqa, increasing the risk-free rate for Austria and Germany to 3% from 2.4%. That adjustment pushed the brokerage's cost-of-equity assumption up to 10.6% from 10.0%. Despite the higher discount rate, Kepler judged that the stronger profitability outlook more than offset the impact, permitting a modest increase in the target price to €17.00.
Forecasts and operating outlook
Kepler's forward model includes non-life insurance revenue of €7.59 billion for 2026, rising to €8.05 billion in 2027 and €8.45 billion in 2028. Operating profit is projected to climb from €645 million in 2026 to €684 million in 2027 and €733 million in 2028.
Adjusted net profit is forecast at €452 million in 2026, €486 million in 2027 and €527 million in 2028. Kepler expects the combined ratio to be 89.6% in 2026 and 89.9% in both 2027 and 2028. The firm's Solvency II ratio is modelled to edge higher from 277.3% to 282.8% across the period.
Return on equity is projected at 14.2% for 2026 and 2027, increasing slightly to 14.4% in 2028. On valuation multiples, the stock is forecast to trade at 12 times 2026 earnings, falling to 11.2 times in 2027 and 10.3 times in 2028. Kepler also projects dividend yields of 4.4% in 2026, 4.8% in 2027 and 5.2% in 2028.
Broker preferences and positioning
Within the insurance sector, Kepler continues to favor Allianz and Prudential as its preferred names, while maintaining Legal & General as its least favoured stock.
What this means
Kepler's decision to downgrade Uniqa to "hold" while increasing near-term earnings estimates and raising the price target underscores a situation where improving operational outlooks are counterbalanced by stretched valuation and higher discount rates. The brokerage's updated portfolio preferences signal relative opportunities and concerns within the insurance sector.