Direct Line Share Price Targets Cut Following Q3 Update

Direct Line Insurance Group (LON: DLG) shares fell over 3% on Tuesday after the company posted a third-quarter trading update.

The insurer revealed a decline in group premiums in the quarter, impacted by decreasing sales in its Home and Motor divisions, but the company maintained its medium-term targets and dividend outlook.

In its statement, Direct Line said group premiums decreased 5.8% to £807.2 million, with double-digit declines in its Motor and Home insurance units offsetting increases in the Rescue and Commercial units.

At the time of writing on Thursday, Direct Line shares are trading around the 194.6p mark, up 0.4%. So far, in 2022, the company’s shares are down over 31%.

Following the Q3 update, various analysts cut their price targets on the stock: 

JPMorgan analyst Kamran Hossain trimmed the firm’s price target on Direct Line Insurance to 220p from 230p, keeping a Neutral rating on the shares.

Deutsche Bank’s Rhea Shah lowered the price target on Direct Line to 225p from 230p, maintaining a Hold rating.

Meanwhile, Morgan Stanley analyst Ashik Musaddi also reduced the firm’s price target on Direct Line to 200p from 210p, holding its Equal Weight rating on the stock. 

According to TipRanks, out of eight analysts, two have Buy ratings on Direct Line, while six have Hold ratings, with the average price target at 226.38p, representing a potential 16% upside from current levels. 

Back in late September, HSBC upgraded shares of Direct Line to Hold from Reduce, assigning the stock a 190p price target.