The share price of the FSTE 100-listed Admiral PLC (GB:TSCO) fell by 1.87% yesterday after analyst Thomas Bateman from Berenberg Bank downgraded his rating from Buy to Hold. Bateman, however, increased his price target on the stock from 2,543.0p to 2,961.0p, now predicting an upside of 10.86%.
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Year-to-date, the stock has gained around 24% in trading despite a difficult macro environment.
Based in the UK, Admiral Group is a financial services company catering to around 9 million customers globally.
Bateman’s Views on Admiral
Bateman noted that Admiral is one of the best-performing shares in the insurance sector in 2023. He expects the “very strong re-pricing” in the insurance sector in the UK to offset the effects of high inflation costs. This bodes well for the company’s EPS growth in the future.
Additionally, Bateman thinks that the company’s “reserving position” is its “key strength” and is not fully appreciated. An insurance reserve is a designated amount of funds set aside by an insurance company to cover future claims.
However, the analyst downgraded the stock, citing the company’s high valuation multiple, which could restrict further gains in the short term. He also pointed out that the company’s accounting is “complex,” leading to some level of risk.
What is the Price Target for Admiral?
According to TipRanks, ADM stock has received a Moderate Buy consensus rating, backed by four Buys, two Holds, and one Sell recommendation. The Admiral share price target is 2,605.14p, which is around 2.5% below the current trading levels.
