RSA share price rallies as Barclays turns bullish on stock

on May 3, 2016
Updated: Mar 11, 2020

Shares in RSA Insurance Group (LON:RSA) have jumped more than three percent in London this morning, outperforming the broader market, after analysts at Barclays turned bullish on the blue-chip insurer. The upgrade comes ahead of RSA’s first-quarter update on Thursday.

As of 10:21 BST, RSA’s share price had added 3.09 percent to stand at 473.30p, outperforming the blue-chip FTSE 100 index which has slipped deep into the red in today’s session and is currently 0.69 percent worse off at 6,198.51 points. RSA’s shares have gained some 11 percent over the past year, and are up more than 10 percent in the year-to-date.
Barclays lifted its stance on RSA from ‘equal weight’ to ‘overweight’ today, and hiked its price target on the stock from 457p to 545p, arguing that the insurer’s 2015 underlying results were ‘very strong’, beating company collected underlying earnings per share consensus by 20 percent.

“RSA has set out its ambition to close the gap to the best in class players in each of its core markets, UK, Scandinavia and Canada by 2018,” the analysts said, as quoted by the Guardian. “While we acknowledge that it is rare for a mid of the pack insurer to become a ‘best in class’ insurer, we do believe RSA has set out a realistic plan to get there.”
The analysts added that they believed there was “significant upside even if the company is only partially successful” and that the revised valuation was based on the FTSE 100 insurer getting halfway to its targets.
The upbeat comments come after Deutsche Bank recently referred to RSA as a safe bet with some opportunity. Credit Suisse meanwhile continues to see the FTSE 100 insurer as an ‘outperform’, valuing the stock at 510p.
As of 10:44 BST, Tuesday, 03 May, RSA Insurance Group plc share price is 473.10p.