Global Brokerage Reduces Top 3 Insurance Sector Stocks To Neutral, Target Price Slashed

Leading global brokerage firm Macquarie Research, in its latest report, decided to downgrade top 3 stocks from the Life & Health Insurance sector to "neutral" from "outperform" rating. The analyst cut the target price of these stocks on the basis of weak growth outlook of the insurance industry. These stocks are ICICI Prudential Life Insurance, HDFC Life Insurance, and SBI Life Insurance. All three stocks are trading 16% to 22% away from their 52-week low price at present. Check details below:

1. HDFC Life Insurance: Macquarie Research has slashed the target price of HDFC Life Insurance to Rs 556 apiece from Rs 655 apiece previously. Last trading price of HDFC Life Insurance share is Rs 581.60 per share with intraday fall of 2.04% as of June 9, 2023 on BSE. HDFC Life Insurance share has given 18% return in last 3-months, 2% return YTD, and declined 4% in last 1-year. HDFC Life Insurance stock fell 15% in last 2-years and gave return of 15% in last 3-years. HDFC Life Insurance company has a market capitalisation of Rs 1,25,023.31 crore.

HDFC Life's 52-week high price is Rs 620.70 per share and 52-week low price is Rs 457.95 per share, respectively. HDFC Life is currently trading 21% away from its 52-week low price.

2. ICICI Prudential Life Insurance: The analyst has decided to bring down the target price of ICICI Prudential Life Insurance to Rs 486 apiece from Rs 580 apiece earlier. Last trading price of ICICI Prudential Life Insurance share is Rs 495.00 per share with intraday fall of 3.48% on BSE. Its 52-week high price is quoted at Rs 608.65 apiece and 52-week low price is quoted at Rs 380.95 per share. The stock is currently trading 23% away from its 52-week low price.

ICICI Prudential share gave return of 25% in last 3-months, 8% return in last 6-months, and declined 12% in last 1-year. In last 2-years, ICICI Prudential stock fell 13% and gave 25% return in last 3-years.

3. SBI Life Insurance: The global brokerage firm has also cut the target price of SBI Life Insurance to Rs 1306 per share from Rs 1580 per share, respectively. Last trading price of SBI Life Insurance is quoted at Rs 1233.80 per share. It witnessed a decline of 0.31% as of June 9, 2023 on BSE. Its 52-week high price on BSE is Rs 1339.55 per share and 52-week low price is Rs 1039.25 per share, respectively. Its market capitalisation is Rs 1,23,175.97 crore.

In last 3-months, SBI Life Insurance share delivered 12% return, declined 3% in last 6-months, and surged 6% in last 1-year.

SBI Life Insurance stock is trading 16% away from its 52-week low price.

According to Macquarie, companies operating in insurance sector and the overall sector lack near-term catalysts and, unless there is a strong and meaningful rise in growth, the performance of insurance companies is likely to lag.

It is worth noting that Insurance stocks witnessed pressure soon after the government in the budget recommended that the proceeds of insurance policies with premiums in excess of Rs 5 lakh would be taxed in hands of holder.