Cattolica Assicurazioni in orbit. What ignited the title?


Nothing short of spectacular today for Cattolica Assicurazioni, which has gained ground for the fifth consecutive session, but today it has done so with surprising liveliness.

Cattolica Assicurazioni sports a nice rally with boom volumes

After leaving the session on Friday with an increase of more than 2% behind us, the title today scored a mighty rally, stopping at € 4.11 6, with a rise of 9.53%.

Trading volumes were explosive, given that at the end of the session over 4.3 million shares passed on the market, more than quadruple the average of the last 30 days of approximately 930 thousand pieces.

Cattolica Assicurazioni thus continues to climb the slope after the thud accused exactly last Monday, when the day had ended with a lunge of almost 17%.

Cattolica: bancassurance agreements with Ubi Banca extended

Today, the stock ignited in the wake of a slightly positive newsflow, after Cattolica Assicurazioni communicated that it had agreed with Ubi Banca on the postponement to June 30, 2021 of the existing bancassurance agreements, expiring on December 31, 2020.

At the same time, the deadline for any communication of the cancellation of the agreements by one of the two interested parties was postponed.

Equita SIM analysts point out that Lombarda Vita represents one of the main bancassurance agreements for Cattolica Assicurazioni, with a contribution to the 2019 profit of approximately 29 million euros and its non-renewal, not replaced by alternative partnerships, constitutes one of the main risks on the the company’s bottom line.

Experts believe that a renewal beyond June 30, 2021 is highly unlikely in the event of the success of the Intesa OPS on Ubi Banca.

Cattolica: Equita comments on the latest news

Equita SIM recalls that in its estimates, Cattolica Assicurazioni is able to maintain a perimeter similar to the current one also in the coming years.

For analysts, the news relating to the postponement of the bancassurance agreements with Ubi Banca is marginally positive, but in light of the IVASS requests on capital strengthening, their view on the share does not change.

This considering the significant risk of overhang resulting from a particularly significant capital increase. Do not neglect the persistence of uncertainty on the evolution of bancassurance agreements.

Equita SIM notes that the stock trades with a 2021E price-earnings ratio of 9.3 times, incorporating a capital increase of 500 million euros.

As mentioned before, the analysts do not lose their balance on Cattolica Assicurazioni, reiterating the “hold” recommendation, with a target price of 3.7 euros.

Cattolica Assicurazioni under the lens of Bca Akros

Similar the indication arrived on Friday from Banca Akros which on one hand confirmed the “neutral” rating and on the other cut the target price from 6 to 3.5 euros.

In light of the recent findings by IVASS, analysts have made it known that they are considering the required capital increase of € 500 million for Cattolica Assicurazioni.

At the same time, however, they point out that the scenario is still uncertain and there are margins to limit this amount, also due to the fact that the company was already considering the issue of a 200 million euro Tier 1 instrument.

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