Share Prices & Company Research

Market News

16 Jun 2021 | 17:46

Credit Suisse stays at 'underperform' on Admiral Group, points to inflation and regulations

(Sharecast News) - Analysts at Credit Suisse reiterated their 'underperform' recommendation on shares of Admiral Group in anticipation of slower growth, new regulations and accelerating inflation. The Swiss broker estimated Admiral's organic vehicle growth rate at 4.1%, forecasting that it would decline to 1% in 2021 due to its relative pricing differential and more flexible policies elsewhere.

Its traditionally lower non-shopper rate of 14.1%, versus rivals on 16.9% also left it more exposed to the upcoming FCA pricing guidelines due to a lower ability to retain clients.

Then there were the fast increases in used car prices which in April had reached a clip of 8.1%.

Lastly, and from a valuation viewpoint, the insurer's shares were trading on a 2021 price-to-earnings multiple of 20.4, which was 2.1 standard deviations greater than their five-year average.

Its shares were also trading on a PE premium of two times versus sector peer Direct Line, the broker said.

Credit Suisse also kept its 310.0p target price for the shares unchanged.

Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
Continuing our Personal Service: View our Latest COVID-19 Update: 7th December 2021
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.