FBD share-price surge predicted
Published 21/12/2010 | 05:00
FBD's share price could almost double as the group's core insurance business returns to growth and property losses taper off, an analyst at Goodbody said yesterday.
The comments came in a detailed note to clients where Goodbody set a price target of €10 for FBD against its current level of around €6.
Goodbody analyst Ken Darmody cited "continuing market share gains, a strong balance sheet and a secure dividend with excellent potential for growth" as the key reasons to buy the stock.
FBD has outperformed the market by about 35pc "in recent years", Mr Darmody said, pointing to potential for further growth as the insurer increases its reach in urban areas through commercial brokers and online.
Despite the rise in weather-related claims in recent months, Goodbody believes significant strides have been made in educating consumers on claims prevention, which should blunt the claims spike of future extreme weather events.
Goodbody also believes FBD's property and leisure write-downs should fall sharply next year, with just another €20m to go against the cumulative €190m taken so far.