Last checked at 
(Sharecast News) - Shares in non-life insurance firm Beazley gained on Tuesday after broker Berenberg raised its target price, saying that the stock's recent underperformance "confounds reality".
Beazley's share price was up 4.6% at 527p as of 1215 BST. With the stock still down 21% since the start of the year, Berenberg expects major upside, lifting its target price to 850p from 825p and keeping its 'buy' rating.
"Beazley has been the second-worst-performing insurer in the SXIP, which, in our view, completely confounds reality," said Berenberg analyst Tryfonas Spyrou. "Underwriting conditions across c60%+ of Beazley's book are fundamentally among the best in many decades, while the asset side is also benefiting from a 5%+ recurring yield."
Beazley's net asset value per share increased by 14% simply by recalibrating for the new International Financial Reporting Standards that came into place on 1 January 2023 (IFRS 17) This "appears to have been entirely overlooked by the market", Spyrou explained.
Beazley is a leader in speciality liability insurance and cyber insurance, and Berenberg believes that it has the capabilities and knowledge that out-compete rival firms.
"In our view it appears Beazley effectively also became a momentum trade on the back of cyber pricing, which is now unwinding and thus weighing down on the share price," Spyrou said. "Nevertheless, we expect cyber to continue to be Beazley's most profitable business line while property, where prices are rising to multi-decade highs, is second best. None of this appears to have been priced in."
