Weekly Reports | 10:30 AM
A summary of the highlights from Broker Call Extra updates throughout the week past.
Broker Rating Changes (Post Thursday Last Week)
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INSURANCE AUSTRALIA GROUP LIMITED ((IAG)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
A change of analyst at Jarden results in a reordering of domestic general insurance preferences, upgrading Insurance Australia Group to Overweight from Neutral and downgrading Suncorp ((SUN)) to Neutral from Overweight.
The broker mentions better risk reward in Insurance Australia Group as organic tailwinds fade.
The new analyst argues the premium rate momentum is contracting across commercial, personal lines and NZ, making Suncorp’s push for organic commercial growth harder despite its favourable consumer mix.
While Suncorp is seen as better positioned for organic consumer driven growth, the broker expects both majors to face market share pressure and trims gross written premium forecasts by about -1%.
Insurance Australia Group is viewed as having a catalyst rich outlook, including potential RACWA approval, FY27 cost out upside, commercial capital optimisation, and quota share reinsurance commission benefits.
EPS forecasts are downgraded around -1% for each insurer. Insurance Australia Group target is lowered to $8.20 from $8.30.
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ACCENT GROUP LIMITED ((AX1)) Downgrade to Hold from Buy by Petra Capital.B/H/S: 0/0/0
Accent Group delivered a weak AGM trading update, assesses Petra Capital, with financial year-to-date like-for-like sales slipping to -0.4% after an early improvement. The broker lowers its target to $1.08 from $1.65 and downgrades to Hold from Buy.
The gross margin contracted -160bps as the group increased promotional activity to manage inventory, driven largely by underperformance in lifestyle footwear, explains the analyst. It's noted sports categories continued to trade well.
Earnings (EBIT) guidance was materially downgraded to $55m-$60m from around $80m for 1H26 and $85m-$95m from circa $118m for FY26.
Petra Capital believes category-specific issues, including a lack of new lifestyle product amid intense competition, are the primary drag rather than macro factors alone.
SUNCORP GROUP LIMITED ((SUN)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
A change of analyst at Jarden results in a reordering of domestic general insurance preference, upgrading Insurance Australia Group ((IAG)) to Overweight from Neutral and downgrading Suncorp to Neutral from Overweight.
The motivation given is a better risk reward in Insurance Australia Group as organic tailwinds fade.
The new analyst argues the premium rate momentum is contracting across commercial, personal lines and NZ, making Suncorp’s push for organic commercial growth harder despite its favourable consumer mix.
While Suncorp is seen as better positioned for organic consumer driven growth, the broker expects both majors to face market share pressure and trims gross written premium forecasts by about -1%.
Insurance Australia Group is viewed as having a catalyst rich outlook, including potential RACWA approval, FY27 cost out upside, commercial capital optimisation, and quota share reinsurance commission benefits.
EPS forecasts are downgraded around -1% for each insurer. Suncorp's target is lowered to $19.50 from $21.60.
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