Steadfast Group’s shares are trading at record-low valuations relative to the broader market, according to analysts, amid ongoing speculation that the broking giant is in the sights of private equity suitors for a potential buyout.
Citi analysts, cited in The Australian’s DataRoom column, say the $5.7 billion group is currently trading on a price-to-earnings multiple at roughly a 40% discount. The report said private equity is in the early stages of weighing up an acquisition of the business.
Blackstone has been among the names discussed in connection with a possible deal, although the New York-based buyout firm has denied this is the case.
Despite Steadfast’s discounted valuation, Citi’s analysts remain confident the group will deliver on its FY26 earnings per share (EPS) guidance of 6% to 10% year-on-year growth. However, they note that the composition of that growth is shifting, with a heavier dependence on accelerated acquisitions and cost-cutting.
According to the report, pricing in December has so far held up, providing further evidence that the market is stabilising. Steadfast’s total acquisition spend over the year has climbed to $303 million.
Morgan Stanley analysts said Steadfast has reported Australian average premium rate increases tracking above 2.4% year to date, with many business lines experiencing mid- to high-single-digit rises. However, they suggested Steadfast’s business mix appears less favourable than the broader market.
In the domestic market, commission rates are falling, but fee rates are rising, and Steadfast is continuing to extract cost efficiencies.
“While the increases (at least 2.4 per cent) reflects trends to the end of November, Steadfast indicated they were not seeing pricing deteriorate in … December.”
This compares with Steadfast’s expectations for Australian premium rate increases of 1% to 2% in FY26.
Morgan Stanley added that within the headline premium increase of at least 2.4%, Australian personal lines and SME pricing is running at mid-to-high single digits. By class, Home premiums are up by more than 7.8%, Motor by more than 4.7%, and Business Package by more than 6.1%. Strata remains positive, with residential premiums up by more than 0.8% and commercial strata by more than 5.8%.
JPMorgan analysts, meanwhile, highlighted that broker premiums are coming under pressure.
“As the commercial insurance rate cycle saw softening both in Australia and globally, the insurance brokers have de-rated materially.”
Steadfast remains a key talking point in the sector after private equity firms EQT and CVC Capital explored a buyout of its smaller listed rival AUB, before ultimately walking away.
At the close of trade, Steadfast shares were up 4.9c at $5.14, giving the group a market capitalisation of $5.7 billion.
