UBS has downgraded shares in both M&G PLC (LSE:MNG) and Admiral Group Plc (LSE:ADM), citing deteriorating sector dynamics and valuation concerns following strong year-to-date gains.
Admiral was cut from 'buy' to 'neutral' amid signs that UK motor insurance pricing is recovering more slowly than expected.
UBS said it now anticipates pricing to catch up with claims inflation in the first half of 2026, rather than in late 2025, pushing out the expected earnings recovery.
“We now find ourselves 7–9% below consensus EPS for 2026 and 2027,” analyst Will Hardcastle wrote. “A 3% two-year EPS CAGR is unlikely to attract a re-rating until pricing conditions improve.”
The price target was lowered to 3,300p from 3,950p, offering just 5% upside to Monday’s close of 3,140p.
Separately, M&G was also cut to 'neutral', with UBS arguing that the shares now reflect fair value after a 38% rally this year.
Despite a strong solvency position and robust asset management growth in 2025, UBS sees limited scope for upside.
“Growth has been superb, but is unlikely to repeat,” analysts said, adding that high equity exposure leaves M&G vulnerable in a downturn. The price target was lifted slightly to 290p.