Sharecast - "We are now buy-rated on the UK motor sub-sector as pricing and Ogden tailwinds put us circa 17% ahead of Admiral FY24E consensus earnings per share whilst we are circa 7% ahead of Direct Line (LON:DLGD)’s FY25E consensus OPBT due to continued motor margin recover to a NIM of 11%," it said.
Citi (NYSE:C) said its own motor claims inflation index points to material improvements since 1H23 as it sees claims inflation at only 5.5% in October following material decelerations in damage related repair costs and improvements in repair cycle times.
"This points to a much better starting point for claims inflation in 2024E compared to +12.7% we estimated in December 2022 and is ultimately positive for 2024 margins," it said.
Citi hiked its price target on Admiral (LON:ADML) to 2,941p from 2,057p.
At 1100 GMT, Admiral shares were up 3% at 2,699.68p and Direct Line was 2.6% higher at 189.25p.