Steadfast, AUB Group climb on Goldman Sachs outlook
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The news: Shares in insurance brokers Steadfast Group and AUB Group lifted on the ASX, with Goldman Sachs seeing both companies as undervalued ahead of their first-half results later this month.
The numbers: Steadfast shares were up 1.8% to $5.80 and AUB shares rose 2.2% to $30.20 by 3pm AEDT. Meanwhile, the financials (-0.17%) was the second worst performing sector as the ASX 200 added 0.59%.
Goldman Sachs upgraded its rating on Steadfast from 'neutral' to 'buy' and retained its 12-month price target of $6.50. It also reiterated its 'buy' rating and $34.50 price target on AUB.
The context: Goldman Sachs analysts said both Steadfast and AUB look "relatively cheap" compared to their global peers, which face similar dynamics on premium rates.
The analysts noted that organic growth for the brokers should remain supported by premium rate increases and volume growth, while both companies should see margins improve this financial year.
The brokers also continue to have "substantial headroom", the analysts said, which should support their mergers and acquisitions programs.
The source: Goldman Sachs research
