Are IAG shares worth buying right now?

IAG shares have climbed high, but is there further to go?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published April 3, 2024 6:30 am AEDT

Are Insurance Australia Group Ltd (ASX: IAG) shares worth buying right now? Good question.

Looking at the IAG share price over the past 12 months, you might be forgiven for instantly dismissing this proposition. After all, IAG has gained a whopping 35% over the past year, and 13% since the beginning of 2024 alone. That's probably enough to give anyone who has heard the term 'buy low, sell high' some pause.

Yesterday this ASX 200 financial stock even hit a new 52-week high. Yep, IAG shares clocked a new high watermark of $6.48 in afternoon trading on Tuesday, nicely matching the S&P/ASX 200 Index (ASX: XJO)'s new record high.

The company then cooled off a little, finishing trade yesterday up 0.16% at $6.41.

We did get some news out of IAG shares on Tuesday morning, which may have contributed to investor optimism yesterday. The company told investors that Robert Cutler has been appointed as IAG's new Group General Counsel (a top legal role), effective 4 April.

Cutler will replace Peter Horton in this role. Horton left IAG in December last year, after which the role went to Karen Ingram in an interim capacity.

IAG CEO Nick Hawkins told investors that Cutler has "extensive governance experience as a member of various boards, and has advised on regulatory and risk management matters for private and public organisations".

So this might be what was boosting investor sentiment yesterday. Either way, no doubt investors will be cheering IAG's new 52-week high with gusto.

A young man goes over his finances and investment portfolio at home. — Image source: Getty Images

Are IAG shares a buy at new 52-week highs though?

But that gets us back to the question of whether IAG shares are still a buy after their impressive runup over the past 12 months.

Well, ASX broker Goldman Sachs seems to think the company is in a good spot right now. As reported by The Australian, Goldman analysts Julian Braganza and Brian Kim reckon IAG, as well as its rival insurer Suncorp Group Ltd (ASX: SUN), will "benefit from a positive reinsurance market at their upcoming mid-year renewals".

Reinsurance is an important component of IAG's business model, and these Goldman analysts point out that "mid year renewal discussions were taking place earlier and reinsurers were 'willing to secure capacity'".

Even so, last month, my Fool colleague covered Goldman retaining a neutral rating on IAG shares, with a 12-month share price of $6.

However, other ASX brokers in Macquarie and Citi were more bullish. Macquarie gave the company a 'buy' rating and a share price target of $6.40, while Citi expects IAG shares to climb to $6.75 over the next 12 months.

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