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Thursday, November 24, 2011

Axa insurance stock prices forecast 2012

Axa insurance stock prices forecast 2012 : Axa SA, France's largest insurer, cut a full-year profit forecast and said its 2012 targets have become ``increasingly obsolete'' as the financial crisis leads to a global economic slowdown.

Axa, which fell 2.4 percent in Paris trading, expects 2008 profit excluding investment swings and merger-related costs of between 3.6 billion euros ($4.62 billion) and 4 billion euros. In August, the insurer predicted earnings would match 2007's 4.96 billion euros unless markets deteriorated ``materially.''

Insurers' profit has suffered as the financial crisis roils markets, sapping demand for policies linked to stock performance and cutting the value of investments. Axa said today the market plunge makes the company's goal of doubling revenue and tripling earnings between 2004 and 2012 ``increasingly obsolete.''

``They set aside their targets waiting to see how the markets normalize,'' said Pierre Flabbee, a Paris-based analyst at Kepler Capital Markets. ``That's an acceptance of reality.''

Axa fell 32 cents to 13.12 euros, valuing the insurer at 27 billion euros. The stock has dropped 52 percent so far this year, more than the 48 percent decline in the Bloomberg Europe 500 Insurance Index.

Capital Plans

Chief Executive Officer Henri de Castries told investors in Paris the assumptions backing Axa's 2012 profit goals ``have dramatically changed.'' The targets implied an 8 percent average annual increase in equity markets. For Axa to reach the goals, stock markets would have to surge 35 percent in 2009 and 2010, and climb 8 percent annually in the following two years.

The Dow Jones Stoxx 600, a benchmark for European equities, has tumbled 31 percent since the end of June on concern the global credit crisis will stifle economic growth. Falling stock prices, on top of losses tied to the U.S. subprime mortgage market, forced some insurers to seek more capital to build a bigger cushion against losses. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today

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