AlphaValue/Baader Europe Adjusts EPS Forecasts for Munich Re on Expected 'Weaker' P&C Normalized Combined Ratio

07:01 AM EDT, 08/11/2026 (MT Newswires) -- AlphaValue/Baader Europe revised its EPS estimates for Munich Re (MUV2.F), saying it expects a "weaker" normalized combined ratio in the German reinsurance group's core property and casualty division. "We have cut our FY27 EPS estimate for Munich Re by c. 7%, reflecting lower profitability assumptions in Property & Casualty reinsurance. While the recently published Q2 results were strong, coming in significantly ahead of the net income target of EUR6.3bn for FY26 on a pro-rata basis, the beat was mainly driven by lower-than-expected large losses. Excluding the [favorable natural catastrophe] experience and other exceptional items, the picture was different: the [normalized] combined ratio actually deteriorated in Q2, with further pressure expected in H2 and into 2027," analysts said Tuesday. While management highlighted diversification benefits from life and health reinsurance and primary insurance, the research firm noted that P&C reinsurance accounts for 50% of the group insurance result. Consequently, the projected pressure on the normalized P&C combined ratio poses a "significant earnings drag" for full-year 2027. Against this backdrop, analysts raised their 2026 EPS forecast by 0.98% to 50.3 euros, while cutting their 2027 EPS projection by 5.78% to 49 euros. AlphaValue/Baader Europe rates the stock at reduce, with a price target of 541 euros.