Shares of British insurance company Direct Line Insurance (GB:DLG) slumped (down over 26% at the time of this writing) as the company withheld its final dividend for 2022. The harsh weather conditions impacted the company’s underwriting business and its payouts.
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DLG stated that the sub-zero temperatures led to an increase in freeze-related claims. Management expects freeze-related claims to come to around £90 million. Overall, weather-related claims are projected to be worth £140 million in 2022, much higher than the earlier expectation of £73 million.
Besides for weather-associated claims, the decline in the valuations of commercial property holdings due to a weak macro environment and higher motor claims inflation remains a drag.
While the company will no longer pay the final dividend for 2022, it has returned £1.5bn of capital to its shareholders in the last five years.
Is DLG Stock a Buy, Sell, or Hold?
DLG stock carries a Hold consensus rating on TipRanks, reflecting two Buy, five Hold, and one Sell recommendations. Moreover, analysts’ average price target of 228.25p implies 34.9% upside potential.
Our Insider Trading Activity tool reveals that DLG stock has a negative signal from insiders, who sold shares worth £484K last quarter. Nevertheless, DLG stock sports an Outperform Smart Score of nine on TipRanks.
