Beazley PLC (LON:BEZ) saw its shares rise in late morning trading Thursday after a strong set of first quarter results, however City broker Numis downgraded the stock on valuation grounds.
In the first part of 2018, Beazley saw gross written premiums (GWP) increase by 10% to US$631mln compared to the same period last year, driven by a 29% rise in premiums from its property division to US$108mln.
READ: City broker upgrades Beazley on insurer’s bullish outlook for 2018
The group also saw growth across its reinsurance, speciality lines, and political, accident and contingency divisions, which rose by 7%, 6%, and 14% respectively.
In a note to clients, Numis moved its rating to ‘Hold’ from ‘Add’ in a reversal of its upgrade in February.
“The company Q1 IMS shows a 10% increase in GWP to $631m, (Q1 2017 $573m) and much in line with our forecast of $628m, driven by property ahead by 29%,” the broker said.
Numis added: “The year to date investment return was effectively zero, or $(1.1) mln, and in line with our forecast. The recent strength in the share price means we move our recommendation to HOLD (from ADD).”
Since Numis’ upgrade, Beazley’s share price has risen by almost 8.5% to 608p at close on Wednesday from 560.5p at close on 8 February when the upgrade was announced.
In late-morning trading Thursday, Beazley shares were up slightly 0.1% at 609p.