How hard is IAG going to run?, page-85

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Macquarierates IAG asUpgrade to Outperform from Neutral(1) -

Macquarie believes the reaction to the Victorian earthquake has been overdone and, after allowing for quota shares, the company's maximum event retention of $169m is not expected to be breached.

The broker forecasts Insurance Australia Group is over provisioned by $400m for business interruption claims.

Macquarie assesses the stock is at an attractive discount of around -10-17%, depending on the valuation metrics, and upgrades to Outperform from Neutral. Target is raised to $5.70 from $5.40.

Target price is$5.70Current Price is$4.81Difference:$0.89
IfIAGmeets the Macquarie target it will return approximately19%(excluding dividends, fees and charges).

Current consensus price target is$5.54, suggesting upside of15.2%(ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full yearFY22dividend of20.00cents and EPS of25.70cents. At the last closing share price the estimated dividend yield is4.16%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is18.72. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is27.5, implying annual growth ofN/A. Current consensus DPS estimate is21.2, implying a prospective dividend yield of4.4%. Current consensus EPS estimate suggests the PER

Macquarie forecasts a full yearFY23dividend of23.00cents and EPS of29.20cents. At the last closing share price the estimated dividend yield is4.78%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is16.47. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is29.6, implying annual growth of7.6%. Current consensus DPS estimate is23.3, implying a prospective dividend yield of4.8%. Current consensus EPS estimate suggests the PER is16.2.