Investing.com -- UBS Global Research downgraded ASR Nederland (AS: ASRNL ) to a “neutral” rating from “buy,” citing limited upside and full valuation across key metrics.

In a note dated Friday analysts flagged that ASR’s forecasted capital return yield of 8% and a 11% yield on operating capital generation (OCG) and free cash flow (FCF) now align with the average for the Dutch insurance sector.

The OCG/FCF yield has also fallen below ASR’s internal return on investment hurdle rate of 12%, dampening the likelihood of a special share buyback in the absence of a placing by Aegon (NYSE: AEG ).

UBS increased its 12-month price target for ASR to €60 from €54, driven by model adjustments and expectations of €2 billion in excess capital by 2028.

However, this target price is already above the firm’s sum-of-the-parts valuation range of €38–57 per share, suggesting little near-term valuation headroom.

While ASR’s solvency ratios remain strong and the company is expected to generate excess capital in the coming years, UBS concluded that the potential benefits of this capital are already reflected in the share price.

The brokerage also noted that ASR’s trading multiples, including price to operating capital generation, offer limited upside relative to historical averages, particularly in the context of rising interest rates in Europe.

In comparison to peer NN Group (AS: NN ), ASR is considered fairly valued on IFRS-based metrics but appears more expensive on relative terms.

UBS expressed a preference for NN Group within its Dutch insurance coverage, pointing out NN (NASDAQ: NNBR )’s more favorable valuation profile.