RSA share price steady as UBS says ‘buy’

Shares in RSA Insurance (LON:RSA) have climbed into positive territory today as UBS lifted its rating on the blue-chip group. Proactive Investors quoted the analysts as commenting that the London-listed insurer is well placed to deliver against lower consensus market expectations as it undergoes a significant year of restructuring.

As of 14:47 GMT, RSA’s share price had added 0.34 percent to 523.80p, marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.12 percent higher at 7,192.01 points. The group’s shares have lost more than 15 percent of their value over the past year, as compared with about a 0.5-percent gain in the Footsie.

UBS turns bullish on RSA

UBS hiked its rating on RSA from ‘neutral’ to ‘buy’ today, further lifting its valuation on the shares from 550p to 600p, in the wake of the insurer’s full-year results last week. Proactive Investors quoted the broker as commenting that since its last note, consensus forecasts for the insurer’s earnings per share in 2019-20 had fallen by about four percent, while the stock was trading at a 30-percent discount to its synthetic sum of the parts valuation.

“We now find RSA well placed to deliver vs. lower expectations; UBSe 2019-21E EPS is 2-10% ahead of consensus; we believe gradual delivery can help close RSA’s execution discount,” the broker pointed out, adding that it saw that “as an attractive entry point to a stock with attractive assets, defensive characteristics, self-help and an improving dividend yield underpin”.

Other analysts on insurer

Royal Bank of Canada, which rates RSA as an ‘outperform,’ lowered its price target on the shares from 675p to 650p yesterday, while earlier this week, JPMorgan Chase & Co, which is ‘neutral’ on the blue-chip insurer, trimmed its valuation on the stock from 615p to 610p. According to MarketBeat, the London-listed company currently has a consensus ‘buy’ rating and an average price target of 642.29p.

As of 15:07 GMT, Wednesday, 06 March, RSA Insurance Group plc share price is 523.80p.