RSA share price outperforms as JPMorgan turns bullish on group

on Oct 24, 2017
Updated: Mar 11, 2020

Shares in RSA Insurance (LON:RSA) have climbed into positive territory in London this afternoon, outperforming the broader market, as JPMorgan turned bullish on the stock. The rating upgrade comes ahead of the blue-chip insurer’s third-quarter results next week.  

As of 13:37 BST, RSA’s share price had added 0.40 percent to stand at 632.50p, outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.04 percent worse off at 7,521.44 points. The group’s shares have added more than 12 percent to their value over the past year, and are up by some eight percent in the year-to-date.

JPMorgan turns bullish on RSA

JPMorgan Cazenove lifted its rating on RSA from ‘neutral’ to ‘overweight’ today, and hiked its price target on the shares from 700p to 725p, as it took a look at the UK non-life insurance sector. While the broker’s top pick in the sector remains Direct Line (LON:DLG), it is closely followed by RSA, whose shares, the analysts argue, have underperformed in recent months, meaning that the valuation is now attractive.

“We believe the pricing backdrop in commercial lines may improve following recent natural catastrophe events, and with additional capital return likely to commence from FY18E, RSA’s income credentials could be meaningfully improved,” the broker explained, as quoted by Sharecast.

Other analysts on RSA Insurance

Citigroup recently reiterated its ‘neutral’ stance on the FTSE 100 company, valuing the shares at 615p. According to MarketBeat, RSA currently has a consensus ‘hold’ rating and an average price target of 648.82p.

The blue-chip insurer is scheduled to update investors on its third-quarter performance on November 2, after earlier this year, it unveiled a rise in interim profits. RSA’s dividend, however, fell short of expectations at the time. 

As of 14:05 BST, Tuesday, 24 October, RSA Insurance Group plc share price is 632.50p.