FBD shares tipped to rise 50pc
SHARES in FBD touched their highest level in almost four months yesterday after Bloxham Stockbrokers issued an upbeat note, predicting the insurer could see its share price rise by more than 50pc.
The note from Bloxham, which also acts as FBD's broker, comes after the plc's management twice upgraded their 2011 profit forecasts in recent months despite the harsh economic environment.
In yesterday's note, Bloxham cited that "positive momentum" as a major factor in their favourable assessment of FBD's share price trajectory.
Bloxham also noted that FBD had "considerably reduced" its exposure to property market woes by spinning its leisure and property business off into a joint venture with the plc's biggest shareholder.
The insurer's "commitment to a progressive and sustainable dividend policy" was another factor cited, along with "a continued moderation of the decline in domestic demand".
All in, Bloxham believes there is "scope" for FBD to trade at between 1.2 times and 1.5 times its 'net asset value', implying a increase in price of between 50pc and 110pc against the plc's current trading levels.