Conduit Holdings Limited (LON:CRE), the reinsurance broker that floated last December, has got the thumbs-up from Peel Hunt.
The broker has initiated coverage with an “add” recommendation and a fair value estimate of 620p.
Floated at 500p a pop, giving the newly-formed company a market value of around £826mln, the shares now trade at 525p.
“We are drawn to Conduit Re’s diversified underwriting strategy and focus on reinsurance markets, with a risk profile that limits the downside risk of major natural catastrophe events. The new venture is beginning with sufficient excess capital to absorb losses and pay a dividend,” the broker said in it is initiation note.
The company is so new, its first set of full-year results released last month actually only covered the period from October 7 to the end of the year, a period in which it made a loss of US$4.6mln.
It’s clearly early days yet and Peel Hunt believes “the chances are the Conduit team will be able to build a profitable book, having the wind in its sails in a hardening (re)insurance cycle”.