Citi upgrades Direct Line to 'buy'

28th Aug 2024 09:29

(Sharecast News) - Citi upgraded Direct Line Insurance on Wednesday to 'buy' from 'neutral' and lifted the price target to 223p from 208p.

The bank said it doesn't agree with the recent selloff in the share price, which is down around 12% since the end of May.

"We are more constructive as we see favourable underlying motor trends (UK Motor claims picture continuing to improve), significant contribution from non-motor which means that Motor NIM does not have to reach 13% to hit the group target and more confidence in restructuring given the extent of people change," it said.

Citi said it was increasing its 2026 earnings per share estimate by 12% and is around 14% ahead of 2026 consensus pre-tax profit forecasts.

At 1040 BST, the shares were up 1.5% at 189.40p.