Hiscox Upgraded to Buy: Growth Trajectory, Margin Expansion, and Attractive Valuation Drive Positive Outlook

Hiscox, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Daniel Wilson-Omordia from Morgan Stanley upgraded the rating on the stock to a Buy and gave it a p1,460.00 price target.

Daniel Wilson-Omordia has given his Buy rating due to a combination of factors that emerged from the recent Capital Markets Day. The management of Hiscox provided a clearer outlook on the growth trajectory and margin expansion for its Retail segment, which constitutes a significant portion of its premiums. They also introduced a $200 million efficiency program aimed at enhancing margins, and there was a rebasing of the ordinary dividend expected in 2025, along with potential for additional capital returns. These developments have addressed previous concerns and present a favorable earnings momentum, especially in light of the challenging pricing environment in the specialty and reinsurance sectors.
Furthermore, the shares are currently trading at an attractive valuation compared to historical levels, with a price-to-earnings ratio of 8.4x for 2026 and a price-to-book ratio of 1.4x for 2025. The market is likely to wait for concrete evidence of the execution of management’s plans, but the commitment to regular updates provides confidence. The unexpected cost savings program, which aims to cut $200 million in annual costs by 2028, is expected to significantly boost net earnings, adding approximately $160 million by 2028. This, along with the anticipated acceleration in Hiscox Retail’s top-line growth, supports the positive outlook and the upgrade to an Overweight rating with a new price target of 1,460p.

In another report released yesterday, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a p1,385.00 price target.