AUB Group Limited (AUB)
BUY

Premium upgrades

 10 Aug 2023
Sector: Financials

TRADING UPDATE

Need To Know

  • Underlying Net Profit After Tax (UNPAT) upgraded by 5.7% (at the midpoint) from previously announced guidance in May to $129m
  • Strong performance has been driven by robust trading in May/June and better-than-expected performance from Tysers
  • Premium growth momentum remains strong 

Investment Implications

AUB's upgrade has been driven by strong trading throughout the key renewal period of May and June. AUB also called out strong execution of strategic priorities and a better-than-expected performance from Tysers. 

Results from global and domestic insurers show that the momentum of premium growth remains solid, and we now see potential upside risk to FY24 numbers, where the market is expecting UNPAT of $159m. 

The stock has underperformed the ASX200 over the past month (>10%) and this announcement should see the stock outperform in the lead up to the result on 22nd August 2023.

Investment View

The upgrade comes after a previous upgrade on 18th May 2023 and confirms our thesis of strong earnings growth momentum for AUB. The positive performance of Tysers will also likely provide additional earnings upside risk to FY24 numbers. We retain our Buy rating.

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Stock Overview

Share Price

Company Overview

AUB is an insurance company in Australia and New Zealand providing insurance broking, advisory services, and technology solutions to SME clients.

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