Aviva share price: Analysts weigh in on insurer ahead of results

on Mar 1, 2019
Updated: Mar 11, 2020
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Aviva (LON:AV) is set to continue the reporting season next week and Hargreaves Lansdown reckons that who will be its next chief executive is just one the many questions that need answering at the results, Proactive Investors reports. The results will come after it the blue-chip insurer recently secured court approval to transfer around £9 billion in assets to a new Irish company as it prepares for Brexit.

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Aviva’s share price has climbed higher in London in today’s session, having added 1.84 percent to 431.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.53 percent higher at 7,112.15 points. The group’s shares have given up more than 14 percent of their value over the past year, as compared with about a one-percent drop in the Footsie.

Aviva results preview

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Aviva is scheduled to update investors on its performance on Thursday and IG reports that Bloomberg consensus estimates suggest that the company will report revenue of £31.21 billion and operating profit of £3.16 billion.

“After weaker-than-expected interim results, markets will be eager to see whether the group has been able to achieve mid-single digit (five-percent) growth in operating earnings per share for the full year,” Shaun Murison at IG commented in a note.

Proactive Investors meanwhile has quoted Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, as saying that the big question for the blue-chip insurer is how it intends to deliver revenue and profit growth in the years ahead. She reckons that another question is “what does the group plan to do with a capital base that’s already at the top end of target?”

“A share buyback was completed in September – that could be extended, or the group might undertake some M&A,” Lund-Yates pointed out, adding that the insurer “could move to shore up its balance sheet ahead of Brexit, so a decision to decrease leverage might be more plausible”.

Analyst ratings update

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The 14 analysts offering 12-month price targets for Aviva for the Financial Times have a median target of 517.50p, with a high estimate of 575.00p and a low estimate of 450.00p. As of February 23, the consensus forecast amongst 18 polled investment analysts covering the blue-chip group has it that the company will outperform the market.  

As of 14:19 GMT, Friday, 01 March, Aviva plc share price is 431.00p.

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