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Broker Turns More Cautious on Earnings Outlook

Admiral Group (LSE:ADM) shares fell more than 4% on Friday after RBC Capital Markets lowered its recommendation on the insurer and reduced its price target, citing concerns that weakness in UK motor insurance pricing has yet to be fully reflected in earnings.

RBC downgraded the stock to “sector perform” from “outperform” and cut its 12-month price target to 3,450p from 3,560p. The valuation continues to be based on a target multiple of 14 times estimated FY2027 earnings per share.

The broker now expects group pre-tax profit to decline by 8% in 2026 compared with 2025, contrasting with management’s expectation of broadly stable profitability.

UK Motor Insurance Remains the Main Concern

RBC reduced its forecast for UK Motor pre-tax profit in 2026 by 5%, pointing to slower policy growth and the impact of less profitable business written in previous periods flowing through into earnings.

According to the broker, the first half of 2026 is “too soon to see the benefits of rate on margins or volumes,” as pricing reductions implemented during the first half of 2025 continue to affect results.

As a result, RBC increased its forecast for Admiral’s first-half 2026 combined ratio to 85.6%, up from its previous estimate of 83.6%. The company reported a combined ratio of 84.2% in the second half of 2025.

The analysts also noted that UK motor insurance prices rose 4.5% in the year to May, based on consumer price index data, but said this was “likely still lagging claims inflation.”

Meanwhile, the ABI Motor Price Index showed average premiums paid by customers were 4.9% lower year-on-year during the first quarter of 2026, marking the smallest decline since the beginning of 2025.

Including a 4% reduction made in March, RBC said cumulative cuts to its 2026 UK Motor pre-tax profit forecast now amount to roughly 10% so far this year.

International and Specialist Businesses Face Forecast Cuts

The broker also lowered its outlook for Admiral’s non-UK motor operations, cutting its 2026 pre-tax profit forecast for those businesses by 14%.

In the UK Travel and Pet divisions, RBC reduced its 2026 pre-tax profit estimate by 25% to £12 million, reflecting the expected impact of the Iran conflict on travel-related claims and rising veterinary costs.

Forecasts for Admiral’s international operations were also revised lower. Expected pre-tax profit in Italy was reduced to £8 million from £13 million, while the Spanish business is now projected to report a £1 million pre-tax loss.

Earnings and Dividend Expectations Revised Lower

RBC cut its earnings per share forecasts by 6% for 2026, 4% for 2027 and 2% for 2028.

These revisions imply a compound annual growth rate of 2.6% between 2025 and 2028, well below Admiral’s historical five-year EPS growth rate of 7.6% and beneath management’s long-term growth ambitions.

Dividend expectations were also lowered. RBC now forecasts dividends per share of 142p in 2026, 163p in 2027 and 173p in 2028.

Total shareholder returns are projected at 5.7%, 6.4% and 6.9% respectively across those years.

Stronger Growth Needed to Drive Re-Rating

RBC argued that a meaningful re-rating of the shares from current levels would likely require clearer evidence that UK motor insurance profitability is improving or that non-motor businesses are contributing more significantly to earnings.

The broker concluded that this would require “either evidence of a materially stronger turn in UK Motor, or a greater contribution from non-motor lines, which is unlikely until 2028.”

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Sterling Digital Plc (AQSE:ASIC) announced the arrival of key mining equipment at its West Texas site, marking a significant milestone as the Company moves into the commissioning phase ahead of its first Bitcoin mining operations. The Company also raised £383,000 via a share subscription.

Stefan Michaelides, CEO: “The arrival of our generators, data centre infrastructure and ASIC miners is a significant step forward for Sterling as we enter our next stage of growth and enter the operational phase of our strategy. We are now focused on installation, commissioning and moving towards first Bitcoin production.” Read more

B HODL PLC (AQSE:HODL) provided an update on its Lightning Service Provider platform, announcing it is now listed on Amboss Magma, one of the leading marketplaces for Lightning Network liquidity. Read more

Delta Gold Technologies plc (AQSE:DGQ) announced it has commenced Year 2 of its research collaboration with the University of Toronto, with a provisional patent having been filed during the first year of the agreement.

R. Michael Jones, CEO: “Entering the second year of our agreement with the University of Toronto is a significant step for Delta Gold. The filing of the provisional patent by UofT highlights the progress already being made through this collaboration and strengthens our confidence in the potential of the research as we continue to build value from our quantum computing IP strategy.” Read more

Ajax Resources PLC (AQSE:AJAX) provided an update on its Macacha Copper and Silver Project in Argentina. The Company stated that EIA approval is anticipated in July 2026 and that a tender process has commenced for a 5,000-metre drilling programme.

Ippolito Cattaneo, CEO, commented: “The forthcoming drilling programme will represent the first exploration campaign at Macacha in almost two decades and will focus on validating and expanding the historical oxide Mineral Resource Estimate while testing the underlying copper sulphide mineralisation, which remains almost entirely untested.” Read more

All Aquis Stock Exchange Announcements

Energy Markets Rebound Following Diplomatic Setback

Oil prices moved higher on Friday as traders reacted to growing uncertainty surrounding the recently announced agreement between the United States and Iran. The cancellation of planned negotiations in Switzerland, combined with escalating military activity involving Israel and Hezbollah, prompted investors to reassess the likelihood of a lasting resolution in the region.

Brent crude rose 0.64% to $80.36 per barrel, while U.S. West Texas Intermediate gained 1.7% to $77.88 per barrel. Despite the recovery, both benchmarks remained on track for weekly declines of roughly 8%.

The more actively traded August WTI contract climbed 59 cents to $76.44 per barrel.

Suspended Talks Fuel Concerns Over Long-Term Stability

Investor confidence was shaken after Switzerland confirmed that discussions between U.S. and Iranian officials would not proceed as scheduled.

The talks were expected to focus on implementing a broader framework agreement designed to bring a lasting end to regional tensions. However, the withdrawal of U.S. Vice President JD Vance from the planned meeting raised doubts about the strength of the diplomatic process.

Vandana Hari, founder of Vanda Insights, said: “Prices may have bottomed out and we may see a renewed climb accompanied by plenty of volatility as cracks have already emerged in the memorandum of understanding.”

She added: “This is not the geopolitical backdrop that would give the market any confidence in resuming Hormuz transit.”

Hormuz Developments Continue to Drive Market Direction

Earlier this week, oil prices fell sharply after vessels successfully resumed passage through the Strait of Hormuz following the interim agreement between Washington and Tehran.

Several tankers, including Saudi vessels carrying approximately six million barrels of crude, completed the transit without disruption, boosting hopes that normal shipping activity could gradually resume.

Market analysts estimate that more than 85 million barrels of oil currently stranded in the Gulf region could eventually return to global markets. In addition, the agreement includes provisions for lifting U.S. restrictions on Iranian oil exports, potentially increasing supply further.

Tim Waterer, chief market analyst at KCM, said: “Traders are still waiting for hard evidence that tanker traffic through the Strait of Hormuz is actually normalising before committing to the next leg lower.”

Export Activity Begins to Recover

Energy producers across the Middle East are already preparing for a return to more normal export conditions.

Kuwait Petroleum Corporation announced that all force majeure measures introduced during the conflict have been withdrawn. Iraq has also indicated that its oil sector is ready to gradually restore output and return production to pre-conflict levels.

Lebanon Conflict Remains in Focus

While progress has been made between the United States and Iran, continued fighting between Israel and Hezbollah remains a major source of uncertainty.

Investors are closely monitoring developments, as any escalation could undermine recent diplomatic gains and once again threaten energy supplies from the region.

Stronger Dollar Keeps Precious Metal on Track for Weekly Loss

Gold prices continued to weaken on Friday, putting the precious metal on course for a third consecutive weekly decline as investors focused on the prospect of higher U.S. interest rates and a stronger dollar.

Spot gold fell 1.8% to $4,134.86 an ounce, while August gold futures dropped 2.2% to $4,152.25. The metal is now set to end the week roughly 2% lower.

Although gold benefited earlier in the week from optimism surrounding the temporary agreement between the United States and Iran, those gains faded after the Federal Reserve signalled that monetary policy could remain restrictive for longer than markets had anticipated.

Markets Price in Greater Chance of Another Rate Increase

The Federal Reserve kept benchmark interest rates unchanged this week, but policymakers delivered a message that investors interpreted as increasingly hawkish.

Nine of the central bank’s nineteen policymakers expect at least one additional rate increase before the end of the year, reinforcing expectations that borrowing costs may stay elevated well into 2026.

Comments from Fed Chair Kevin Warsh helped push Treasury yields higher and lifted the U.S. dollar to its strongest level in more than a year. The U.S. Dollar Index remained near those highs after surging 0.8% during the previous session.

The stronger dollar and higher bond yields continue to weigh on gold, which does not generate interest income and becomes less attractive when competing assets offer higher returns.

Market pricing currently suggests an over 80% probability of another Fed rate increase before year-end.

Delayed Iran Talks Add Fresh Uncertainty

Investor sentiment was also influenced by reports that negotiations aimed at finalising a broader agreement between Washington and Tehran had been postponed.

Switzerland confirmed that talks scheduled for Friday would not take place, while reports indicated that U.S. Vice President J.D. Vance had suspended his participation in the planned discussions.

The setback has raised questions about how durable the interim agreement may prove to be, even though the deal remains in place for now.

Oil Rebounds but Remains Near Multi-Month Lows

While crude oil prices recovered modestly on Friday, they remain sharply lower for the week following expectations that the Strait of Hormuz could gradually reopen to normal shipping traffic.

The decline in energy prices has eased inflation concerns, reducing some of the safe-haven demand that had previously supported gold.

Broader Metals Complex Also Moves Lower

Other precious metals also came under pressure, with silver falling 2.5% to $64.09 an ounce and platinum losing 1.4% to $1,674.51.

Copper prices weakened as well, with London Metal Exchange copper futures falling 0.9% and U.S. copper futures declining 1%, reflecting broader caution across commodity markets.

European Debt Markets End Volatile Week on a Firmer Yield Footing

European government bond yields moved higher on Friday, capping a week marked by dramatic swings in sentiment as investors navigated shifting expectations around Middle East diplomacy, central bank policy and energy markets.

Germany’s benchmark 10-year Bund yield climbed to 2.95%, recovering from two-month lows reached earlier in the week as investors reassessed geopolitical risks and the outlook for inflation.

Doubts Over U.S.-Iran Agreement Lift Oil Prices

Market sentiment shifted after U.S. Vice President JD Vance withdrew from a scheduled trip to Switzerland, where discussions with Iranian representatives were expected to begin on implementing the recently announced 14-point agreement between Washington and Tehran.

The development raised questions about the durability of the accord and prompted a modest rebound in crude prices, with oil gaining close to 1% as traders priced in renewed uncertainty surrounding the region.

Federal Reserve Surprise Continues to Influence Markets

The week’s volatility was also driven by developments in the United States, where a majority of Federal Reserve policymakers unexpectedly signalled that interest rates could move higher later this year.

The hawkish tone forced investors to rapidly revise their expectations, with markets moving to price in an 80% probability of a rate increase by October. The shift contrasted sharply with the start of the week, when optimism surrounding the U.S.-Iran agreement and the reopening of the Strait of Hormuz had fuelled demand for government bonds.

Falling Oil Prices Had Supported Bonds Earlier in the Week

At the height of the Middle East tensions, surging energy prices pushed bond yields to multi-month highs as investors anticipated a potential inflation shock that could require tighter monetary policy from the European Central Bank.

However, a roughly 10% decline in oil prices over the course of the week eased those concerns and encouraged investors to scale back inflation expectations. The unwinding of geopolitical risk premiums provided support for eurozone bonds after a prolonged period of pressure.

ECB Outlook Remains in Focus

The yield on Germany’s policy-sensitive two-year government bond rose to 2.628%, reflecting changing expectations for future ECB policy decisions.

Adding to the debate, ECB Chief Economist Philip Lane said the eurozone economy appeared capable of withstanding a higher interest-rate environment, reinforcing expectations that policymakers may remain cautious about easing monetary policy too quickly.