Swiss Life Earnings: Good France and Asset Management Results; Shares Roughly Fairly Valued

For the first half of 2024, Swiss Life has reported solid results, mainly driven by asset management and France. The business delivered CHF 632 million in net profit for the first six months of the year compared with our CHF 1.237 billion full-year forecast. This translates to a 9% return on equity so far, 18% annualized, which sets the business up well against its 10%-12% 2022-24 return on equity target. With CHF 1.263 billion of cash upstreamed to the holding, that takes total upstreamed over this strategic cycle to CHF 3.4 billion, ahead of the CHF 2.8 billion-CHF 3.0 billion cumulative target for 2022-24. While the fee result looks better, this is one area where Swiss looks a little light. For this year, management is guiding to the low end of the CHF 850 million-CHF 900 million target. The CHF 300 million buyback has been completed and the greater-than-60% dividend payout ratio looks likely. We maintain our fair value estimate of CHF 770 and our rating of no moat. Shares are roughly fairly valued.