SBIGY - Admiral: Stock Cheapest Since March 2020 Even As U.K. Motor Cycle Turns

• Admiral shares have fallen 43% from their peak to their lowest since March 2020, with a 14.1x P/E and a 6.7% Dividend Yield.
• The pricing cycle in U.K. motor insurance has started to turn, albeit unevenly and with price increases lagging claim cost inflation.
• We expect price increases to accelerate and benefit Admiral. In the meantime, competitors have flat or declining market shares.
• Earnings should be resilient against recessions and inflation, and higher interest rates will benefit Admiral's Investment Income.
• With shares at 2,103p, we expect an exit price of 3,544p and a total return of 97% (23.0% annualised) by 2025 year-end. Buy.

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