Update shared on 04 Dec 2025
Fair value Decreased 1.32%Analysts have nudged their price target on Insurance Australia Group slightly lower to approximately A$8.83 from about A$8.95, reflecting marginally softer revenue growth expectations, partly offset by a modest improvement in forecast profit margins and valuation multiples.
What's in the News
- Raised fiscal 2026 guidance for gross written premium growth to around 10%, up from a previous low to mid single digit range, driven by the planned inclusion of RACQ Insurance from 1 September 2025 (company guidance).
- Upgraded reported insurance profit outlook for fiscal 2026 to AUD 1,550 million to AUD 1,750 million, an increase of AUD 100 million at both ends of the prior range (company guidance).
- Signalled stronger scale and earnings contribution from the RACQ Insurance acquisition, with integration benefits now reflected in medium term forecasts (company guidance).
Valuation Changes
- Fair Value Estimate has edged down slightly to approximately A$8.83 from A$8.95, reflecting a modestly lower intrinsic valuation.
- Discount Rate is unchanged at 6.67%, indicating no revision to the assumed cost of capital.
- Revenue Growth assumption has weakened marginally, with the forecast decline deepening from around 10.78% to about 10.93%.
- Net Profit Margin forecast has risen slightly, improving from roughly 9.59% to about 9.63%.
- Future P/E multiple has eased modestly to about 21.24x from 21.51x, implying a small contraction in the valuation multiple applied to earnings.
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