Allianz operating profit rose 13% in 4Q beating estimates
Allianz's 2023 outlook overshadowed a fourth-quarter operating profit that came in above analyst estimates, and a proposal to increase the dividend by 5.6% to EUR 11.40 per share. Operating profit rose 13% in the fourth quarter, as the life and health business benefited from a higher investment margin in Allianz’s home country. But the non-life business fell short, which the company attributed to higher attritional losses related to claims inflation. The asset management business struggled as well, reporting a 22% drop in profit as both Pacific Investment Management and Allianz Global Investors saw outside clients pull money. Allianz also booked a hit of about EUR 400 million last quarter related to the sale of the Russian business.
Operating profit rose 13% YoY to EUR 3.96 billion, beating average analyst estimate by 11.9%. Property & Casualty operating profit declined 5.4% YoY to EUR 1.47 billion, missing Street view by 10.9%. Life & Health operating profit increased by 50% YoY to EUR 1.90 billion, beating consensus expectations by 55.7%. Asset Management operating profit declined 22% to EUR 806 million, missing expectations by 1.3%. Net income amounted to EUR 2.01 billion compared to a loss of EUR 292 million a year ago. Allianz reported earnings of EUR 4.99 per share, missing analyst estimate of EUR 5.08.
Valuation: ALLIANZ SE-REG currently trades at 8.11x P/E 24E, below its 5-year historical average of 9.39x and below the MSCI EUROPE Insurance Index (10.61x). On a 2024E P/B basis, the stock is trading at 1.28x, above its 5-year average of 1.08x and below the MSCI EUROPE Insurance Index (1.53x). On a P/S 24E basis, the stock is trading at 0.55x, in line with its 5-year average of 0.57x and below the MSCI EUROPE Insurance Index (0.71x).
We reiterate our strong buy recommendation.
Management Outlook
Allianz forecast operating profit for 2023 in the range of EUR 13.2 billion to EUR 15.2 billion (consensus estimate EUR 14.21 billion).
Financials
| Fiscal year 2023* | Fiscal year 2024* | Fiscal year 2025* | |
|---|---|---|---|
| Revenue in mn | 153,405 | 151,283 | 155,478 |
| Revenue growth (%) | 4.8 | -1.4 | 2.8 |
| Net Income in mn | 6,838 | 9,493 | 10,214 |
| Adjusted EPS | 17.42 | 24.00 | 26.36 |
| Profit margin (%) | 4.5 | 6.3 | 6.6 |
| Return on equity (%) | 10.8 | 17.0 | 16.9 |
| P/E ratio (x) | 12.7 | 9.2 | 8.4 |
| P/S ratio (x) | 0.6 | 0.6 | 0.6 |
| P/B ratio (x) | 1.6 | 1.4 | 1.3 |
| Dividend Yield (%) | 5.1 | 5.5 | 5.9 |
Stock and Price Data
| Country | Market Cap in bn | ISIN | Sector | Price | Small Cap |
|---|---|---|---|---|---|
| Germany | EUR 89.3 | DE0008404005 | Financials | EUR 221.40 | No |
Performance
Performance in %
| Since inception* | YTD | Last 6 months |
|---|---|---|
| 45.80 | 10.2 | 23.9 |
VP Bank Sustainability Score
Good
VP Bank Sustainability Score
5
ESG Score
2
ESG-Momentum
1
Business practices
5
Business activity
3
SDG/Impact ScoreVP Bank AG
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Prices per previous day close. Sources for charts and stats:, Bloomberg, VP Bank
Selected Information ©2023 MSCI ESG Research LLC. Reproduced by permission.
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VP Bank Sustainability Score: Our overall score expresses a comprehensive assessment of a company's sustainability. It is composed of the ESG rating, momentum, business practices and activities. The scale ranges from “insufficient”, "below average", “average”, “good”, "very good" to "excellent". |
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ESG rating: The ESG rating reflects how sustainable a company is in terms of environmental, social and governance criteria. The indicators may vary depending on the industry. The scale ranges from -1 ("insufficient") to 5 ("excellent"). |
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Momentum: The momentum indicator measures the extent to which the ESG rating of a company has changed. The scale ranges from 1 ("below average") to 5 ("excellent"). |
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Business practices: The business practices of a company are analysed and checked whether it is in breach of international standards. Exemplary companies receive a high score, while misdemeanours lead to a low score depending on the severity of the breach. Serious violations lead to exclusion. The scale ranges from -1 ("questionable") to 5 ("exemplary"). |
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Business activities: This value scores the business areas in which a company is active. Activities which we consider "critical" are excluded, while borderline and questionable areas receive a deduction. Activities that are not "critical" receive a positive assessment. The scale ranges from -1 ("insufficient") to 5 ("excellent"). |
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SDG and Impact Score: This value compares a company's products and activities or dedicated impact solutions with the UN's 17 Sustainable Development Goals (SDGs) and measures the extent to which they contribute to or contradict the achievement of the goals. The scale ranges from 1 ("below average") to 5 ("excellent"). |
A detailed explanation of our methodology can be found here: www.vpbank.com/sustainabilityscore
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