S&P/ASX 200 Index (ASX: XJO) stock Insurance Australia Group Ltd (ASX: IAG) is slipping today.
IAG shares closed yesterday trading for $8.77. At the time of writing in afternoon trade on Friday, shares are changing hands for $8.71 apiece, down 0.7%.
For some context, the ASX 200 is also down 0.7% at this same time.
With 2.37 billion shares outstanding, this sees the insurance company commanding a market cap of $20.6 billion.
Image source: Getty Images
How have IAG shares been tracking?
As you may be aware, IAG shares have been on a tear these past three months.
What kind of tear are we talking about?
Well, since the recent lows on 7 April, the shares in the ASX 200 stock have soared 19.2%.
Taking a step back, the IAG share price is up a slightly lesser 17.3% since this time last year. Thought that doesn't include the 29 cents a share in partly franked dividends the company has paid stockholders over the full year.
IAG reported its natural perils and financial guidance update on 1 July.
The ASX 200 stock estimated that its FY 2025 natural perils costs will come in at approximately $1.08 billion, or around $200 million less than its FY 2025 natural perils allowance.
And IAG listed its FY 2025 reported insurance profit guidance range to $1.60 billion to $1.80 billion, up from the prior guidance of $1.40 billion to $1.60 billion.
Time to sell the ASX 200 stock?
Despite these solid metrics, Red Leaf Securities' John Athanasiou has called time on the ASX 200 stock (courtesy of The Bull).
"IAG's strong rally to a recent high means much of its positive outlook is already priced into the share price," he said, citing the first reason to sell IAG shares. "Despite sector tailwinds, such as premium increases and improving margins, its valuation looks extended when compared to peers."
The second reason he recommends selling now is the intense ongoing competition in the industry.
"Competition remains fierce across personal and commercial insurance lines, adding further pressure," Athanasiou said.
As for the third reason to sell, Athanasiou concluded:
With fewer catalysts ahead and earnings expected to normalise, IAG's risk/reward scenario is unattractive, in our view. For investors seeking value or growth, it may be time to take profits and seek better opportunities elsewhere.
Not so fast…
DP Wealth Advisory's Andrew Wielandt has a more positive outlook for IAG shares (from The Bull).
"Increasing insurance premiums and favourable weather conditions contributed to a strong first half profit in fiscal year 2025," said Wielandt, who has a hold recommendation on the ASX 200 stock.
"The share price is trading near consensus, so short term upside is uncertain before the heightened risk of the storm and cyclone season from September," Wielandt added.
