Admiral Group Shares Get Lift as Goldman Sachs Ups Rating

Admiral Group (LON: ADM) shares have climbed 14.2% year-to-date and more than 10% over the past 12 months, trading at 3,674 pence, with a 0.7% rise on Thursday following Goldman Sachs’ upgrade of the insurer to Neutral from Sell.

ADM briefly touched a new 52-week high during the session before pulling back.

Goldman Sachs analyst Andrew Baker raised the firm’s price target on Admiral to 3,860 pence from 3,150 pence, citing an improving outlook on two fronts that had previously weighed on the stock.

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According to Goldman Sachs, shares have been volatile this year amid ongoing debate over pricing trends in the UK motor insurance market, as well as concerns about the potential impact of autonomous vehicles and AI-driven distribution on the sector.

The bank said it now sees the UK motor pricing cycle turning, while also expressing greater comfort around the tail risks tied to autonomous vehicle and AI disruption.

Goldman Sachs pointed to January’s announcement between Tesla and Lemonade regarding disruption to the motor insurance market as a key driver of volatility in Admiral shares this year.

However, the bank said it believes the broader motor insurance market will continue expanding over the next decade or more, a view Goldman Sachs said is consistent with recent commentary from other motor insurers during investor calls.

The upgrade marks a shift in tone from Goldman Sachs, which had previously flagged concerns about competitive and technological pressures facing traditional motor insurers.