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Aviva share price: Analysts weigh in on interims

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While Aviva (LON:AV) has solid foundations, the group’s new chief executive Maurice Tulloch is promising ‘more of the same,’ Hargreaves Lansdown has said. The comments came as the blue-chip insurer posted ‘mixed’ results yesterday, and said that it was reviewing its Asia business.

Aviva’s share price was up in Thursday trading, with investors responding positively to the update. The group’s shares, however, have given up just under 23 percent of their value over the past year.

Hargreaves Lansdown weighs in on Aviva

Nicholas Hyett at Hargreaves Lansdown commented in a note yesterday that former  CEO Mark Wilson had transformed Aviva into a leaner, more coherent operation, with a focus on cash generation and financial strength, while the group’s new boss Maurice Tulloch has promised to ‘re-energise’ the group with a focus on insurance fundamentals, customer service, reduced complexity and increasing the pace of change at Aviva.

“Overall, Aviva’s got solid foundations,” the analyst pointed out, adding, however, that “with Tulloch promising more of the same, and debt repayments set to soak up plenty of cash over the next couple of years, top line growth looks like it will be taking a back seat”.

Other analysts on blue-chip insurer

Proactive Investors meanwhile quoted Russ Mould at AJ Bell as commenting that Aviva looked “set to continue to reduce its borrowings to underpin Tulloch’s ‘ready and resilient’ message on the business”.

“And it looks increasingly like market rumours over a sale of Aviva’s Asian business are on the money,” he pointed out, adding that while “Asia has significant potential as far fewer people already have insurance and savings products, Aviva likely lacks the scale to thrive in what is also a highly competitive market”.

UBS reaffirmed the company as a ‘buy’ today, without specifying a target on the Aviva share price. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average valuation of 492p.

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