Aviva share price heads south as Barclays trims valuation

Analysts lower earnings estimates following news of CEO departure

Aviva share price heads south as Barclays trims valuation

Shares in Aviva (LON:AV) have fallen into the red in today’s session as analysts at Barclays lowered their price target on the blue-chip insurer. The move came after the group recently announced that its chief executive Mark Wilson had agreed to step down.

As of 13:27 GMT, Aviva’s share price had lost 1.66 percent to 409.50p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.52 percent lower at 6,964.77 points. The group’s shares have given up about 17.8 percent of their value over the past year, as compared with about 5.7-percent dip in the Footsie.

Barclays trims valuation on Aviva

Barclays maintained its ‘overweight’ rating on Aviva today, while trimming its price target on the shares from 550p to 416p. The move came after the blue-chip insurer revealed last month that its chief executive Mark Wilson would step down from his role immediately, while remaining with the group until April next year.

“Our investment thesis on Aviva was based on the view that this was the year Mark Wilson had to deliver, with capital deployment as the primary tool to catalyse the stock,” the analysts explained, as quoted by Proactive Investors. “However, with his departure, we think the potential for capital deployment is at best delayed and likely lower as a new CEO focuses on different capital priorities.”

The broker further lowered its earnings per share estimates by four percent in fiscal years 2019 and 2020 to account for a higher expense run-rate and a lower level of share buybacks.

Other analysts on blue-chip group

The 17 analysts offering 12-month price targets for Aviva for the Financial Times have a median target of 540.00p on the shares, with a high estimate of 636.00p and a low estimate of 490.00p. As of November 17, the consensus forecast amongst 19 polled investment analysts covering the blue-chip insurer has it that the company will outperform the market.  

As of 13:36 GMT, Tuesday, 20 November, Aviva plc share price is 408.00p.

Top Equities Brokers

0 Brokers added for comparison:
Clear all