Broker snap: Investec highlights risks at Admiral

2nd Dec 2011 10:57

Investec has maintained its sell rating on car insurer Admiral, saying the stock is "going like a freight train...downhill".Admiral's shares tanked at the start of November, when the firm warned that full-year profits would be at the lower end of expectations due to a jump in personal injury claims. "It is not clear whether the claims shocks described in the 9M IMS will be a one-off. This note illustrates what could happen with a significant reserve increase next year. If an event like this did occur, the 10% dividend growth we currently forecast would be void," said analyst Kevin Ryan.The target price is slashed from 843p to 570p.Shares were lower on Friday morning, trading 2.25% down at 891.5p by 10:56.BC