Suncorp (SUN) pushed to fresh 52-week highs yesterday, continuing its strong run as positive earnings revisions support the stock. Consensus FY27 EPS estimates have edged higher over the past three months, while recent industry data remains supportive for domestic general insurers, particularly around motor claims frequency and repair costs. The only issue is valuation – with SUN now trading on 17.1x forward earnings, putting it toward the expensive end of its recent range. The stock still offers a reasonable ~4.1% forward yield, with scope for earnings and dividends to grow if underwriting conditions remain favourable.
- We remain comfortable holding SUN while earnings revisions are positive and the share price holds its breakout. However, after the strong run, valuation is becoming stretched. If the breakout fails, we won’t hesitate to take profit.
MM remain long and bullish SUN for now
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