Morningstar doubts IAG's RAC deal, sees growth targets as optimistic

** Morningstar says it does not expect Insurance Group Australia's IAG.AX proposed RAC Insurance deal to succeed despite concessions offered to address Australian Competition and Consumer Commission's concerns

** Says IAG's 2030 ambitions imply about 7% annual growth, excluding RAC, above its forecast for about 5% growth

** Expects competition to lead to more aggressive pricing as insurers pursue growth in a commoditised market

** Forecasts EPS to rebound more than 20% in fiscal 2027 as natural peril costs normalise, but remain broadly flat through fiscal 2031 as margins moderate

** Says the market is extrapolating recent premium-rate momentum and above-average margins

** Maintains its A$6.80 fair value estimate and considers the shares overvalued

** Stock up 11.4% YTD, as of last close