Amlin’s shares dropped 20%, plummeting from 400p to 320p in a day as investors took fright at the Lloyd’s insurer’s profit warning.
The shares rebounded slightly today, climbing from 320p to 340p.
The share price crash comes a day after Amlin said it expects its first-half 2011 profit after tax to be £53m below previous expectations thanks to rising loss estimates and reserve strengthening. The shortfall is £65m on a pre-tax basis.
Analysts Jeffries fired off a note this morning, stressing that the underlying business was sound and there was an opportunity to pick up stock.
The note said: “The market has not taken the bad news well, and the shares were down 16% by the close yesterday.
“However, at 330p the shares would be on around 1.1x book value, below Catlin and in line with the Bermudians when London market stocks traditionally hold a premium. We see this as an opportunity to pick the shares up trough levels. Amlin reports half-year results on 22 August.”
