LONDON (ShareCast) - (ShareCast News) - FTSE 100-listed insurance firm Admiral Group was downgraded by Berenberg Bank on Tuesday after its analysts pointed towards weakness in the company's international operations.
Admiral's recommendation was lowered to 'sell' from 'hold', although its 12-month target price was increased to 1723p from 1635p.

The insurer's first half results for 2017 were released on 16 August and came out largely in line with expectations, but Berenberg said there was underlying risk associated with increased competition.

"With negative trends affecting Admiral's core business, the continued run-off of its most profitable accident years and our scepticism about its international segment, we downgrade to Sell with a price target of 1,723p," Berenberg analysts said in a note.

Although its international operations continues to show solid growth, that section of Admiral's business is struggling to turn a profit.

"While top-line growth remains strong, profits remain elusive. Given the trends in the UK business, it appears the valuation of the international operations is becoming increasingly stretched."

In an increasingly competitive UK insurance market Admiral has managed to guide its market share upward, but the analysts said they don't see much scope for further improvement.

While we still believe that Admiral is an excellent operator and a best-in-class price comparison website (PCW) insurer, the size of its advantage over peers may not be what it once was," Berenberg added.

Admiral was down 0.52% on Tuesday morning as of 11:05 BST.

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