RBC Capital Markets downgraded Admiral Group to “sector perform” from “outperform,” slashing its price target to 3,100p from 3,600p. The move follows a change in how the insurer will fund its employee share scheme, opting to buy shares on the market rather than issuing new ones, which reduces capital for special dividends.

This structural shift prompted RBC to lower its dividend per share forecasts by about 10% before earnings changes. The broker also cut earnings estimates, citing a more cautious view on the competitive UK motor insurance market. RBC’s new forecasts place it below Visible Alpha consensus, with FY26 and FY27 EPS estimates 8% and 11% lower, respectively.

Admiral shares were trading around 2,948p, offering a 7.2% dividend yield. RBC sees limited near-term upside, arguing sustained outperformance requires clearer evidence of a cyclical turn in pricing. Investors will watch for the company’s next earnings report for further clarity on its capital allocation and the broader insurance market’s trajectory.