Sabre Insurance Group PLC (LSE:SBRE) has had a 'buy' rating maintained at Panmure Liberum as the specialist motor insurer unveiled a new strategy to grow earnings at 10% a year annually ‘through the cycle’.
The broker says the progression will not be linear but it has the ingredients in place to make work, namely “sufficiently rich margins on its core book, the necessary scale, a sophisticated tech stack, and the right management team to execute the new plan”.
The medium-term objective is to achieve over £80m of profit before tax by 2030, implying a 10% a year growth relative to 2024 consensus estimates.
“We think this means consensus earnings need to shift upwards by at least 2% in 2026E and more as models are rolled forward for outer years.
“Prior to this shift in strategy, the market would have assumed peak volumes and earnings to have been reached within the next two years and the underwriting cycle having a dispropionate downward effect on earnings, which would have been true under the old strategy.”
Panmure added that Sabre’s management also reiterated premiums for 2024 are expected to be at record levels and earnings in line with current market expectations.
Buy with a 200p target is the view.
Shares eased 1.7% to 138p.