IAG shares are expected to post modest gains throughout the day following the insurer’s fiscal year 2025 (FY25) results and guidance, according to analyst commentary.
Barrenjoey’s Andrew Adams noted that second-half cash earnings exceeded consensus estimates by 4%, underpinned by a stronger-than-expected underlying insurance margin of 15.8%. However, he said margins are likely to ease towards the midpoint of guidance at 15%, reflecting investment yield headwinds and limited premium rate growth in New Zealand — factors already reflected in market forecasts.
“There is not enough to get the insurance stocks up strongly, but a higher quality beat should avoid any significant share price pressure today,” Adams said.
Citi’s Nigel Pittaway also sees limited downside risk, expecting the shares to trade “flat to up.”
“The FY25 result beats consensus and FY26 guidance, while difficult to interpret totally given the inclusion or exclusion of acquisitions, looks at least as good as consensus if not a bit better, albeit implying relatively low underlying gross written premium growth,” Pittaway said. “The strong renewal rates in Australia and NZ retail are also positive.”