Admiral: H1 Results Show Why It Is The Best UK Motor Insurance Stock
(Preview) Company Update (ADM LN) (Buy)
Summary
Admiral shares rose 12.6% in London on Wednesday after the company released H1 2022 results that were much stronger than expected.
Uniquely among U.K. motor insurers, Admiral profits were larger than in 2019, despite elevated claim cost inflation so far in 2022.
We believe Admiral benefited from more disciplined pricing and a narrower past price gap between new business and renewals.
With large price increases across the U.K. motor sector, we expect customer churn to rise and Admiral to gain share even faster.
With shares at 2,237.0p, the dividend Yield is 7%, and we expect a total return of 101% (26.3% annualized) by 2025 year-end. Buy.
Introduction
Admiral Group plc shares rose 12.6% in London on Wednesday (August 10) after better-than-expected H1 2022 results.
We upgraded our rating on Admiral to Buy in October 2020. Shares fell to a multi-year low in late July after two of its peers issued profit warnings, blaming elevated claim cost inflation. Even with Wednesday's rebound, Admir…