Allianz’s Record Operating Profit Spurs Bullish Bet from Berenberg Despite Market Scepticism

Allianz reports best-ever Q1 operating profit of €4.5bn, but shares fall 1% on geopolitical tensions and rising oil prices. Analysts are split on outlook, with buyback underway.

The market’s reaction to Allianz’s best-ever first-quarter operating profit tells a curious story. While the Munich-based insurer posted an operating result of €4.5bn for the opening three months of 2026 — a 6.6% year-on-year advance — its shares have been unable to shake off the broader headwinds. The stock slipped about 1% on Friday to €375.90, dragged lower by geopolitical tensions in the Middle East and rising oil prices that weighed on the DAX. The decline comes even as the group’s underlying metrics remain solid, with business volume hitting €53bn and the Solvency II ratio climbing two points to 221%.

Much of the hype around the bottom line, however, requires a dose of context. Core net income surged 48.4% to €3.8bn, but that jump was flattered by the disposal of stakes in Indian joint ventures. Stripping out that one-off, adjusted growth came in at a more modest — but still healthy — 7%. Chief executive Oliver Bäte used the moment to reaffirm the full-year target of an operating profit of €17.4bn, plus or minus €1bn, a goal that looks achievable after the strong start.

The analyst community is split on what the numbers mean for the stock. Berenberg stands at the bullish extreme, keeping a “Buy” rating and a price target of €504 — implying upside of roughly 32% from current levels. The private bank argues that market profit forecasts for 2026 may prove too conservative and that Allianz is on track to beat them. At the other end of the spectrum, Barclays remains the most cautious with an “Underweight” call, while RBC rates the shares “Sector Perform” and UBS sits at “Neutral”. DZ Bank, meanwhile, reiterated its “Buy” recommendation on Friday but trimmed its target slightly to €420, citing the strong start to the year, a robust combined ratio in property and casualty, and healthy net inflows in asset management.

Alongside the earnings report, Allianz continues to return capital to shareholders. The €2.5bn share buyback programme announced in February is underway, with €0.3bn already repurchased by the end of March. The dividend for 2025 of €17.10 per share was approved at the annual general meeting on 7 May and paid out five days later. Such moves are typically read as a sign of confidence in future earnings power.

Technically, the stock looks stretched in the near term. The relative strength index sits at 71, indicating an overbought condition that may explain the lack of follow-through despite the record quarter. Year-to-date, the shares are down roughly 3%, though over the past twelve months they have gained about 8%. The next major milestone for investors will be the half-year results due on 7 August, when the market will get a clearer view of whether the first-quarter strength is sustainable or merely an outlier.