The Insurance Australia Group Ltd (ASX: IAG) share price has lifted this week, but what is the future outlook?
IAG shares have jumped almost 4% since market close on Friday — including a 1.1% gain on Thursday — and are currently worth $4.58 a piece.
So what could be ahead for IAG shares?
What’s ahead for IAG?
IAG is an insurance giant operating in Australia, New Zealand and Asia.
Macquarie analysts are concerned market churn may place pressure on IAG shares and the Suncorp Group Ltd (ASX: SUN) share price.
The analysts raised concerns churn will rise across the insurance sector amid a potential affordability crunch, The Australian reported.
But analysts reportedly believe Suncorp may outperform IAG due to better underlying insurance trading ratio margin.
However, Wilson Asset Management (WAM)’s Anna Milne is more positive on the IAG share price. As my Foolish colleague Mitch reported recently, she believes it is one of multiple ASX shares that are among “the highest-quality names in their respective sector”.
Milne also sees the company’s national expansion as a positive for IAG.
Commenting on the outlook for IAG, she said:
IAG is the owner of the brand NRMA, which is one of Australia’s most trusted brands. The psychology of investing in these [IAG and others] quality names is that when share prices decline, it’s seen as an opportunity to get these high-quality names on sale.
IAG reported a $347 million profit in the 2022 financial year, compared to a $427 million loss in FY21.
The company paid a partially franked final dividend of 5 cents per share in September, taking total dividends for the financial year to 11 cents.
Share price snapshot
IAG shares have shed nearly 7% in the past year, while they have risen nearly 8% year to date.
For perspective, the ASX 200 has lost nearly 9% in the past year.
IAG has a market capitalisation of more than $11 billion based on the current share price.
The post Could this be a looming risk for IAG shares? appeared first on The Motley Fool Australia.
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More reading
- The IAG dividend is hitting bank accounts today. What you need to know
- IAG shares ‘highest quality’ in the sector: fundie
- Here’s how many IAG shares the company’s executives have been buying in the past 2 weeks
- Why is the next IAG dividend not fully franked?
Motley Fool contributor Monica O’Shea 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 Australia has recommended Macquarie 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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