Aviva share price: Analysts weigh in on management changes

Shore Capital argues that Aviva’s (LON:AV) new chief executive Maurice Tulloch has ‘a tough job’ ahead of him, Citywire reports. The comments came after the blue-chip insurer unveiled senior management changes yesterday, which saw  Andy Briggs step down immediately as CEO of the company’s UK Insurance business.

The Aviva share price closed lower following the management changes, giving up 0.66 percent to end the previous session’s trading at 422.80p, largely in line with losses in the broader UK market, with the benchmark FTSE 100 index giving up 51.32 points to close 0.68 percent lower at 7,471.75. This morning, the shares have retreated further in early trade, having given up 1.11 percent to 418.10p as of 08:16 BST, as compared with a 0.69-percent fall in the Footsie.

ShoreCap weighs in on Aviva

Shore Capital reaffirmed Aviva as a ‘hold’ yesterday, valuing the shares at 430p. Citywire quoted the broker’s analyst Paul De’Ath as commenting that the group’s new CEO “has a tough job ahead to inject a greater pace of change into an organisation that could still be feeling ‘change fatigue’”.

“The group is the one true composite in the UK but the tangible benefits of this have yet to be exploited other than in capital diversification,” the analyst continued, adding that debt repayments seemed “a better use of excess capital than share buybacks and should help to move the return on equity closer to that of peers”.

Analyst ratings update

Barclays, which is ‘overweight’ on the blue-chip insurer, boosted its target for the Aviva share price from 556p to 562p earlier this month, while Goldman Sachs, which rates the company as ‘conviction-buy,’ trimmed its valuation on the stock from 560p to 535p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 510.83p.