Shares in Standard Life Aberdeen (LON:SLA) have climbed into positive territory in London in today’s session, as analysts at Deutsche Bank turned bullish on the shares, expecting the group to raise capital returns following the sale of its insurance arm. The comments are a boost for the blue-chip group, whose fortunes came under pressure last month following Lloyds Banking Group’s (LON:LLOY) decision to pull out £109 billion of assets under management from the group.
As of 13:30 GMT, Standard Life Aberdeen’s share price had added 0.68 percent to 367.60p, outperforming the broader UK market, with the benchmark FTSE 100 index having given up 1.09 percent to stand at 7,097.30 points. The group’s shares have lost a little over one percent over the past year, as compared with a near four-percent dip in the Footsie.
Deutsche Bank bullish on SLA
Deutsche Bank upgraded Standard Life Aberdeen to a ‘buy’ today, hiking its price target on the shares from 410p to 440p. The move came after the FTSE 100 group recently announced that had inked a deal to sell its capital-intensive insurance business to Phoenix Group, for a total consideration of £3.24 billion.
“It has subsequently become clear that the group is receiving an extra £800 million of cash out of the deal over and above the formal proceeds from the sale itself,” the analysts explained, as quoted by Proactive Investors, adding that they were now lifting their “assumed capital return to £1.6 billion (equivalent to almost 15 percent of the current market cap)”.
Other analysts on blue-chip group
The 14 analysts offering 12-month price targets for Standard Life Aberdeen for the Financial Times have a median target of 460.00p on the shares, with a high estimate of 520.00p and a low estimate of 376.00p. As of March 1, the consensus forecast amongst 16 polled investment analysts covering the blue-chip group has it that the company will outperform the market.