SUN’s Banking Division was the bugbear for SUN over recent years, but now it’s been sold to ANZ, and the business can focus on insurance. This major corporate change will be a lot easier to bed down than the acquirer ANZ, and with margins continuing to increase the stock is on a sound footing moving through 2024. When we take out the proceeds from the bank sale, current pricing suggests SUN is noticeably cheap compared to IAG – if we were traders, it would be long QBE &/or SUN and short IAG.
- We can see SUN outperforming the sector, along with QBE, through 2024/5, and it looks good value under $15.