IAG share price lifts despite mixed FY22 earnings results

The Insurance Australia Group Ltd (ASX: IAG) share price is lifting in early trade after it reported FY22 earnings today.

The ASX finance share darted higher from the open and nudged an intraday high of $4.72 – its highest mark in three months — before levelling off.

Returns for the past 12 months are seen below.

What’s got the IAG share price lifting?

IAG came in with mixed results, printing a 5.7% gain in gross written premium to $13.3 billion.

Net insurance profit narrowed by around 42% to $586 million, and its underlying insurance margin also contracted by about 14.5%.

But its net profit after tax (NPAT) stretched up to $347 million from a $427 million loss in FY21.

This, on earnings per share (EPS) of 13.33 cents. It now forecasts an insurance margin of 16% at the upper end of guidance and return on equity (ROE) of 12-13%.

Despite this, the IAG share price has caught a bid from the open and is now up 130 basis points to $4.67 in morning trading.

Volume was thin to start the session, with approximately 865,000 shares swapping hands at the time of writing, off a 4-week average of 6.6 million.

The question now becomes if IAG can sustain this rally. It first started on 17 June, when shares reversed off a low of $4.14.

Broker opinion is mixed on the matter, with seven out of 11 analysts covering the share still rating it a buy, according to Refinitiv Eikon data.

However, there are two hold and two sell ratings from the same list, and the consensus price target is $4.99 per share, just a small fraction of upside.

In the last 12 months, the IAG share price has dropped 14%, but is up around 10% this year to date.

The post IAG share price lifts despite mixed FY22 earnings results appeared first on The Motley Fool Australia.

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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.

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