Dolmen analyst Stuart Draper rates IL&P shares a buy after the company announced a record result which surpassed broker expectations. The share price rose by 0.9% on foot of the excellent results, to €8.95 yesterday.
Mr Draper believes IL&P shares are seriously undervalued, even if there is no improvement in equity markets from current levels for the rest of 2003.
"We estimate IL&P would still deliver 2003 operating earnings of €280.7m, or €1.06 per share after the share buyback, putting it on a prospective p/e of only 8.3x. This is an 11% discount to the current European insurance sector."
Mr Draper argues that IL&P is much more strongly capitalised, has a much stronger market position, and is focused on a much faster growing market than the European insurance
sector average." Commenting on the results, Merrion Stockbrokers noted: "Despite investment markets having declined on average 9% year to date, in his outlook, David Went, ceo is upbeat, noting that whilst the market is likely to be more challenging in 2003, the outlook for the group is positive."
Looking forward, IL&P group chief executive Mr Went said: "It's clear the market as a whole expects a more challenging environment for retail life and pensions businesses in the current year, and we share that sentiment.
"We do believe however, we are well positioned to make the most of the opportunities, which will remain in the Irish market. In particular we expect residential mortgage sales to remain strong, as will demand for protection insurance products and pensions; all buoyed by a continuing strong Irish economy."