Talanx: Beats Guidance and Our Forecasts; Earnings Power Still Unclear

Talanx reported preliminary net income of EUR 1.581 billion for 2023. This is above our estimate of EUR 1.308 billion. This year's preliminary net income at Talanx is a 30% rise on the prior year. That builds on a 15% and 50% rise in the two years prior to this. We think Talanx has excellent cost controls, based in a low-cost area of Hannover, Germany. However, we still don’t have a strong sense of the long-term earnings power or quality of the business. Therefore, we are maintaining our EUR 55 fair value estimate until we review full financial statements in March. We also keep our no moat rating.