Is the IAG share price a buy following the insurer’s latest update?

A trader stand looking at a sharemarket graph emblazoned with the words buy and sellA trader stand looking at a sharemarket graph emblazoned with the words buy and sell

The Insurance Australia Group Ltd (ASX: IAG) share price is rangebound today and now trades flat at $4.52 apiece.

After posting its preliminary FY22 results and FY23 guidance last week, IAG shares took off and now trade at their highest mark since June.

The insurer booked a $347 net profit after tax (NPAT) and forecasted FY23 gross written premium in the range of 14–16%.

Is the IAG share price a buy?

Analysts at UBS certainly don’t think so. The broker rates IAG a sell and values the company at $4.10 per share.

Following IAG’s preliminary results, the UBS team was unimpressed with the growth trends and noted profit margins are below consensus estimates.

It said that “[r]eserve levels have again proved insufficient as a further top-up was required,” which poses a key downside looking ahead.

Meanwhile, analysts at Macquarie led by Andrew Buncombe reiterated the bank’s outperform rating with a $5.40 price target.

In fact, Macquarie joined 7 other brokers in revising their price targets and/or recommendations on IAG following its preliminary earnings update, per Refinitiv Eikon data.

This contrasts against 2 brokers rating the IAG share price as a hold and sell respectively.

The consensus price target from this list is $4.98 per share, suggesting a small amount of mispricing versus market price.

It is yet to be seen if further upgrades/downgrades are to come through from brokers covering IAG.

In the past 12 months, the IAG share price has lost 9%, despite clipping a 6% gain this YTD.

The post Is the IAG share price a buy following the insurer’s latest update? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Insurance Australia Group Ltd right now?

Before you consider Insurance Australia Group Ltd, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Insurance Australia Group Ltd wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

See The 5 Stocks
*Returns as of July 7 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/0Qs5d8I

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s