On Wednesday, Jefferies adjusted its price target on shares of Insurance Australia Group Ltd. (IAG (LON:ICAG):AU) (OTC: IAUGD), increasing it to AUD7.85 from the previous AUD7.70, while reiterating a Hold rating on the stock. This decision follows the company's announcement of a robust financial performance.
Insurance Australia Group reported a substantial increase in its earnings per share (EPS) on a cash diluted adjusted basis, seeing a 98.3% rise. Furthermore, the firm's insurance profit surged by 79.1% to $1,438 million. The company has also provided guidance for the fiscal year 2025, projecting insurance profits to be in the range of $1,400 million to $1,600 million, with Jefferies' own estimate slightly higher at $1,551 million.
The company's recent performance metrics were largely in line with previous updates from IAG, offering few surprises to investors and analysts alike. For the fiscal year 2024, IAG reported a Representative Insurance Margin (Rep. IM) of 15.6%. Looking ahead, IAG has set a target for the Rep. IM to be between 13.5% and 15.5% for the fiscal year 2025.
Growth in Gross Written Premium (GWP) is expected to moderate in the fiscal year 2025, with projections suggesting a mid to high single-digit increase, down from the 11% growth achieved in the fiscal year 2024. The analyst's commentary underscores the company's steady performance and future targets without indicating any major unexpected developments.
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