Investing.com -- JPMorgan has revised its view on Italian insurers, upgrading Assicurazioni Generali (BIT: GASI ) to Overweight from Neutral and downgrading Poste Italiane (BIT: PST ) to Neutral from Overweight.

The bank also raised its price target on Generali to €37 from €34, citing a stronger profit outlook and capital return potential, while maintaining Poste Italiane’s target at €20.

Analysts now expect Generali to outperform consensus earnings estimates by 5%-7% over 2025-26, supported by “margin tailwinds in its retail-focused P&C business and the potential to redeploy surplus cash.”

Generali trades at around 9.5 times 2026 earnings, a 15% discount to composite peers, and at roughly 1x comprehensive book value.

The improved outlook for Generali is tied to better-than-expected pricing trends and claims dynamics in retail motor and non-motor insurance.

“Pricing has been more buoyant than we expected (~+7%) and well ahead of claims cost trends (~+3% growth in motor),” analysts led by Farooq Hanif noted, adding that actions to prune unprofitable segments have supported margin expansion.

“Unlike its composite peers, Generali is a retail-focused business and not exposed to commercial P&C pricing headwinds, they added.

The analysts also see upside from capital deployment. Generali’s plan includes >10% dividend growth and at least €500 million in annual share buybacks.

With surplus holding company cash projected to reach €1.2 billion by 2027, analysts believe some or all of that could be returned to shareholders. If fully distributed, the total capital return yield could exceed 8.5% in 2027, compared to ~7% for peers.

By contrast, the downgrade of Poste Italiane reflects more muted prospects.

“We expect Poste to meet its €3.1bn adjusted EBIT guidance for 2025E and beat its strategic plan targets for future years... However, we believe consensus is factoring this in, which leaves the risk-reward more balanced,” the analysts argued.

JPMorgan reduced its adjusted EBIT estimates for Poste by 1.5%-3.5% over 2025-27, mainly due to slightly lower forecasts for net interest income.

Moreover, following its recent re-rating and strong outperformance, analysts believe the stock has returned to its typical valuation relative to the European insurance sector.

They see greater potential for earnings surprises elsewhere, particularly at Generali.

The team expects Poste Italiane to maintain an appealing dividend yield.