ADM: Shares Will Outperform On Discounted Multiple And Improved Fundamentals

Admiral Group's analyst price target was raised from £2,550 to £4,100, as analysts point to its status as a growth compounder trading at a discounted valuation.

Analyst Commentary

Bullish Takeaways

• Bullish analysts highlight Admiral Group's classification as a growth compounder. This signals confidence in its continued capacity to expand earnings and market share.
• The company is viewed as trading at a depressed valuation compared to its historical averages and relative peers. This suggests meaningful potential for price appreciation.
• Analysts believe that the updated price target reflects improved fundamentals and robust execution across core business segments.
• Expectations are that continued cost discipline and strategic investments will further enhance shareholder returns over the medium term.

Bearish Takeaways

• Bearish analysts express some caution around the company’s ability to sustain its recent growth pace in a competitive insurance market.
• There are concerns about the potential for external macroeconomic pressures to impact claims ratios and premium growth.
• The current valuation uplift, while justified by recent results, could be affected if execution falters or growth moderates unexpectedly.

Valuation Changes

• Fair Value Estimate has increased slightly from £36.05 to £36.31. This represents a modest upward revision.
• Discount Rate remains unchanged at 7.07%.
• Revenue Growth projection has risen noticeably, increasing from 3.2% to approximately 4.0%.
• Net Profit Margin estimate has declined from 13.36% to 12.61%.
• Future P/E ratio forecast has edged higher, moving from 18.15x to 18.94x.