Berenberg lowers Admiral to 'hold'

(Sharecast News) - Analysts at Berenberg cut their rating on Admiral from 'buy' to 'hold' on Thursday, saying the shares now look fully valued after a sharp rebound this year.

Berenberg said the insurer's business quality and sector backdrop remain intact, but stated the nearterm risk profile has become more balanced. Admiral's shares traded below 2,700p during January's autonomousvehicle scare, hitting decadelow valuation levels, before rallying 55% as concerns faded and pricing conditions improved.

The German bank said the stronger earnings outlook was now well reflected in consensus forecasts, prompting the downgrade, while its 4,200p price target remained unchanged. Estimates were trimmed slightly to reflect a more cautious view on reserve releases in FY26-27.

Berenberg noted that fears over autonomousvehicle disruption have eased, with insurers highlighting a better pricing environment. Admiral's H1 pretax profits fell 18% yearonyear due to lower earned premiums and softer market conditions, but management has pushed through highsingledigit rate increases and peers appear to be following suit. Consensus now expects H2 pretax profit of £526m, up 20% yearonyear, and £1.1bn in FY27 - ahead of Berenberg's own forecasts.

The broker added that Admiral's valuation has normalised, trading near 16x FY earnings, only slightly below its fiveyear average and at a justified premium to the wider European sector given its historically superior cycle management and combined ratios.

Reporting by Iain Gilbert at Sharecast.com