no this is a fundamental downgrade, not limited to BI...

no this is a fundamental downgrade, not limited to BI insurance.

Notice the 'medium' target of 12-13% ROE.

This is the 'target' and that won't be achieved in the short term, its a 'medium term target'.

So then look at the BV per share of IAG: its around $2.53.

So its a simple exercise in multiplying the ROE% by the book value which gives a 'medium term target' EPS of $0.30 - $0.33

This is a big downgrade from their previous 15% which would imply a 'medium term target' EPS of $0.38.

Remember 'medium term target' which means several years.

Hence markets disappointment, hence downgrading of the stock price.

Most importantly, share price is unlikely to rise much given this is managements own 'goal' for the medium term. Hence why be in the stock, hence selling.