Insurer Admiral Group PLC (LON:ADM) extended its post-results recovery today helped by an upgrade in rating from JPMorgan Cazenove.
The bank’s analysts upgraded their stance on the FTSE 100-listed firm to ‘overweight’ from ‘neutral’ and raised the target price to 2,100p from 1,900p.
In lunchtime trading, Admiral shares were up 2.7%, or 49p at 1,878p having added around 2% yesterday continuing the rally from last week’s drop which had followed news of a sharp cut in the Ogden discount rate to be used to personal injury claims.
JPMorgan’s analysts said they had identified the recent share price as an "attractive entry point into what remains a best-in-class insurer.”
They pointed out that, after stripping out the Ogden rate costs, Admiral’s 2016 results from Admiral showed a good underlying performance, with strong 11% growth in UK motor insurance customers.
The analysts also noted that the insurer’s solvency ratio at 212% was ahead of their expectations and well in excess of the 125%-150% target range, with a potential improvement expected.
They concluded: "In our view this again raises the prospect of additional capital return beyond the ~6% yield from 'ordinary special' dividends."