Broker snap: Credit Suisse upgrades Admiral to outperform

21st Feb 2012 12:18

Credit Suisse has upgraded its rating on Admiral from neutral to outperform ahead of the insurer's full-year figures on March 7th.The broker expects the results "to represent the first step for Admiral towards regaining market confidence that bodily injury (BI) challenges are being resolved, with improved clarity expected to provide upside risk to earnings expectations."Credit Suisse experts pre-tax profit to come in at £295m, up 11% year-on-year and similar to the 10% growth guidance provided in the third quarter trading statement. This will translate into earnings per share of 81p.The target price has been lifted from 1,100p to 1,300p."We expect cautious optimism given the encouraging results of independent case estimate reviews, the potential that large claim frequency increases were partially explained by randomness, and in view of the rapid response in terms of pricing," the broker said.BC