Admiral Group Upgraded as RBC Raises Price Target Following Strong Profit Results

RBC Upgrades Admiral Group#

RBC Capital Markets has upgraded Admiral Group Plc from "sector perform" to "outperform". This change comes after the insurer reported its fiscal year 2025 (FY25) results, which exceeded expectations outside of its main UK Motor division. RBC also increased its 12-month price target from 3,100p to 3,560p.

Positive Earnings and Future Projections#

Analyst Ben Cohen noted that the company’s willingness to share a multi-year outlook on profits and earnings per share (EPS) growth is a positive development. The new price target reflects a price-to-earnings (P/E) multiple of 14 times the expected earnings for fiscal year 2027, up from 13 times. This analysis extends forecasts to 2030, indicating a more optimistic view of the company's future.

Performance Highlights#

Admiral's group profit before tax (PBT) for FY25 reached £957.9 million. While the UK Motor division generated £1.02 billion in PBT—slightly below expectations—the Non-UK Motor division performed well, with a PBT of £95 million, 27% higher than previous estimates. Notably, Italy's performance improved significantly, turning a £20 million loss in 2024 into a £3 million profit in 2025.

Future Earnings and Strategy#

RBC has adjusted its forecasts for group PBT to £936 million for FY26, £1.03 billion for FY27, and £1.07 billion for FY28. Basic EPS estimates have also been revised upward for these years. However, the UK Motor division is expected to face challenges in the near term, with forecasts suggesting a drop in PBT to £954 million in FY26.

Management aims to more than double Non-UK Motor PBT by 2028 and plans to focus on becoming a top player in UK Household, Pet, and Travel insurance. The company is shifting from special dividends to share buybacks, with £75 million planned after the first half of 2026 and £80 million after FY26.