WOOD Flash – PZU: 2020E targets a strong push for higher profits
PZU published its updated 2020E strategy yesterday (9 January). We read this strategy as positive. The targets are ambitious, but not very far from our current outlook for PZU; thus, we believe that they may be achievable if properly executed. We liked the presentation the management board gave yesterday. The key KPI announced was for the 2020E ROE to reach >22%. This is higher than our current 2019E forecast for PZU (c.21%) and our long-term ROE assumptions of c.20%, and above the market consensus. While this is subject to our deeper analysis of the announced targets, should they be met, we see 5-10% upside for our current price target (at PLN 51.1 currently) and medium-term financial forecasts for PZU group.Powszechny Zaklad Ubezpieczen is an insurance group based in Poland. Co. is engaged in offering a broad range of insurance and financial products. Co. pursues three main lines of business: Property and Casualty Insurance, offered by PZU; Life Insurance, offered by PZU Zycie; and Open-end Pension Funds, offered by PTE PZU, the manager of OFE PZU Zlota Jesien. Co. maintains a network of sales and service outlets including 500 outlets throughout Poland, including 243 shared outlets (common for PZU and PZU Zycie), 137 outlets of PZU Zycie and 120 outlets of PZU. Co.'s business is focused on the Polish market but it also conducts insurance business in the Lithuanian and Ukrainian markets.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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