Insights

Is the IAG (ASX:IAG) share price cheap after hitting a 52-week low?

Are IAG’s shares cheap at the current level?
The post Is the IAG (ASX:IAG) share price cheap after hitting a 52-week low? appeared first on The Motley Fool Australia. –

The Insurance Australia Group Ltd (ASX: IAG) share price was out of form last week.

At one stage, the insurance giant’s shares were down as much as 8% week to date at a 52-week low of $4.42.

The IAG share price recovered a touch late on in the week before ultimately ending the period 3.5% lower at $4.63.

Is the IAG share price cheap?

One leading broker that believes the IAG share price is trading at a very attractive level is Morgans.

In response to its natural perils claims update last week, the broker retained its add rating but trimmed its price target to $5.36.

Based on the current IAG share price, this implies potential upside of 16% for its shares over the next 12 months.

In addition, the broker is forecasting an 18.2 cents per share dividend in FY 2022. This equates to a 3.9% dividend yield, bringing the total potential return on offer to almost 20%.

What did the broker say?

Morgans notes that IAG had a difficult time in FY 2021 because of stormy weather. And unfortunately, FY 2022 looks set to be the same.

However, its analysts feel the weakness this has caused in the IAG share price has created a buying opportunity for investors. This is due largely to its attractive valuation and positive premium increase outlook.

It commented: “IAG had a difficult FY21 and FY22 is set to be a weather affected year. However, we believe for the patient investor the stock is cheap trading on ~13.5x FY23F earnings, and we expect continuing insurance price increases (further assisted by current bad weather), combined with management’s strategy to improve performance to drive improved profitability over time. ADD maintained.”

All in all, this could make IAG shares one to consider when the market reopens on Monday.

The post Is the IAG (ASX:IAG) share price cheap after hitting a 52-week low? appeared first on The Motley Fool Australia.

Should you invest $1,000 in IAG right now?

Before you consider IAG, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and IAG wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

These top brokers weigh in on the IAG (ASX:IAG) share price

Why Bubs, Dalrymple Bay, IAG, and Redbubble shares are dropping

Top brokers name 3 ASX shares to buy today

Why Ingenia, IAG, Vulcan, and Westpac shares are dropping

ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!