Allianz shares set for further rise: Financial expert predicts positive development and higher dividends for investors

Allianz shares set for further rise: Financial expert predicts positive development and higher dividends for investors

According to a report by www.deraktionaer.de Allianz shares reached a new multi-year high on Friday. This is largely due to the prospect that rate cuts are likely to come later than currently priced in. Tomasz Wieladek, chief European economist at T. Rowe Price, predicts that the European Central Bank (ECB) will leave its monetary policy framework unchanged. The central bank is expected to signal that the interest rate path priced in by the market is too aggressive. Economist Wieladek says the market has priced in 5.5 rate cuts, while analysts expect just three. It is expected that the ECB will not have enough data to assess whether a rate cut is appropriate until June 2024.

The longer high interest rates would benefit companies like Allianz as it would boost insurers' reinvestment results and thus increase earnings per share. This could lead to higher dividend payouts, which is an important selling point for many investors. For the 2022 financial year, Allianz paid out 11.40 euros per share, and it is expected to be at least 12.00 euros for 2023.

From a technical perspective, great things could be on the horizon for Allianz. The shares closed on Friday at 247.15 euros, the highest level since April 2002. The next price targets are 260 euros and 298 euros, the highs of April 2002 and August 2001.

Based on these facts, the current situation could be favorable for Allianz and the insurance sector in general. If the ECB actually cuts interest rates later than expected, insurance companies would benefit from higher interest rates for longer, which would have a positive impact on their profits and dividends. This could represent an attractive investment opportunity for investors.