Citi rates IAG as Buy (1) -Citi's initial assessment of today's...

Citirates IAG asBuy(1) -

Citi's initial assessment of today's interim report reveals a number of twists and buts. Core earnings are well above forecasts, but there has been a different treatment from covid benefits than was anticipated.

The positive comes in the form of management lifting its growth guidance for gross written premia to “mid single digit" from “low single digit”.

There are a lot of buts and ifs in Citi's early response, but the underlying theme seems to be of a better performance from the insurer than was anticipated up until yesterday. Buy. Target $5.60.

Target price is$5.60Current Price is$4.55Difference:$1.05
IfIAGmeets the Citi target it will return approximately23%(excluding dividends, fees and charges).

Current consensus price target is$5.06, suggesting upside of10.2%(ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Citi forecasts a full yearFY22dividend of17.00cents and EPS of20.60cents. At the last closing share price the estimated dividend yield is3.74%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is22.09. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is20.2, implying annual growth ofN/A. Current consensus DPS estimate is14.8, implying a prospective dividend yield of3.2%. Current consensus EPS estimate suggests the PER is22.7.

Forecast for FY23:

Citi forecasts a full yearFY23dividend of28.00cents and EPS of32.70cents. At the last closing share price the estimated dividend yield is6.15%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is13.91. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is29.1, implying annual growth of44.1%. Current consensus DPS estimate is22.1, implying a prospective dividend yield of4.8%. Current consensus EPS estimate suggests the PER is15.8.