Jefferies raises Phoenix price target 120%

US investment bank Jefferies has raised the price target for the share price of Israeli financial services group Phoenix Financial (TASE: PHOE) by a whopping 120% from NIS 68 to NIS 150, while keeping a “Buy” recommendation for the company’s share. The share price is up 0.68% in late afternoon trading.

The new price target reflects a 27.3% premium on Phoenix’s current market price. The previous price target was issued in January and since then the share price has risen sharply and surpassed it. Jefferies SVP insurance equity research Philip Kett noted that the share price is up 123% since the start of 2025 and up 686% over the past five years. He also points out, “Profits have more than quadrupled since 2020, while capital returns are growing rapidly.”

He continues, “This is certainly the largest price target move that we have ever undertaken. (It is unclear if he means for all shares covered by Jefferies or just insurance and financial shares). But the move is supported by two main factors. The first is the introduction of IFRS 17 (An accounting standard designed to improve transparency and help investors better understand the structure of earnings).

Jefferies is also updating its forecasts for Phoenix’s results, due to what it defines as the company’s “remarkable fundamental outperformance,” and is raising its earnings per share forecast by about 70%. The investment bank estimates that net earnings per share will reach NIS 12.5 in 2026, up from NIS 11.07 expected this year and NIS 9.51 reported in 2024.

The second factor that led to raising the price target, according to Kett, is the reduction in the risk premium, “driven by country and market factors.” He writes, “In fact, the share price is already in the process of reflecting this, with the shares up +123% year-to-date, +208% over a year, and +686% over 5 years. Perhaps most importantly though, we would emphasize that such a material share price movement represents only a modest re-rating, with the 1-year forward P/E moving from c.7x this time last year, to c.9x at the start of 2025, and still less than 10 today.”

He adds, “We would point to global peers which have similarly re-rated. For example, in the case of Allianz, our most recent analysis of consensus expectations shows that despite earnings forecasts remaining essentially unchanged, the shares have re-rated materially, with the 1-year forward P/E rising from less than 10 a year ago to 11x today.

Jefferies outlook includes some basic assumptions including that “Israel has structurally attractive demographic and economic tailwinds, supported by high standards of insurance regulation and governance,” and “Attractive tracks for growth in profit based on the aggressive plan recently presented by the company.”