Aviva Share Discussion Threads

[skinny] 13/3/2024 08:43

Nice post muscletrade.

[whatsup32] 13/3/2024 08:23

Slightly of topic , someone here mentioned owning M&G
The Times have a buy rating on them today
"High and well covered dividend suits income investors"

[smurfy2001] 12/3/2024 23:40

Noticed an Uncooked Alert 5 on Bataville posted on 6th March 5:07pm, which potentially coincided with a healthy rise the next day.



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Aviva to continue pricing ‘ahead of inflation’

[rettah] 12/3/2024 17:45

I don't know either! Whichever you use it points to the same conclusion - AV. is undervalued.

[muscletrade] 12/3/2024 17:12

Thanks Rettah, There are three different EPS if memory serves. I chose,(perhaps incorrectly) to use the lowest (basic) of 37.7 at the bottom of page 47.

If I should be using a higher EPS say 40.3 or higher then my estimate of EPS for 2024
would also be higher than 41 which would of course translate to corresponding increase in share price evaluation.

Im open to guidance on the correct EPS figure to use.

[rettah] 12/3/2024 16:08

Nice analysis. In terms of EPS the results presentation gives operating EPS for 2023 of 40.3p (page 58)

[muscletrade] 12/3/2024 15:06

As of this morning based on a poll of 15 Analysts AV 12-Month Price Target
Average 499.07 (+5.51% Upside). The highest target price being 575p(source investing.com).
However at time of writing I have only seen two analyst notes from UBS and BOA since the results last week, who as we know both increased their share price target so it will be interesting to see what other analysts come up with.

I have also done a quick comparison between AV and L&G that some might find interesting.

L&G EPS 13.96p after stripping out longevity and internal pension schemes accounting(their figures and description) giving a PE of 18.36. which compares very favourably with AV.

Why should L&G be rated so much higher than AV????
Well they have a very solid record compared to AVs less than stellar performance (pre Blanc) and a much more consistent dividend record.

The other metric that L&G wins hands down is ROE. of 27.1% (excluding investment and other moves(their words again),AV is still only 12.7% albeit much better than 9.4% in 2022. So AV have much to do to get closer to ROE that L&G enjoy.

Much to play for. If they can continue to improve ROE the PE should follow. If perchance AV enjoyed the same PE as L&Gs 18.36 the share price would be (41x 18.36)...753p...(that isn't going to happen anytime soon unless they are bought out).

Apologies as if this all sounds like ramping. Of course I have interest in AV but Im not inventing imaginary figures , just doing the maths on the figures that are in the public domain.

[muscletrade] 12/3/2024 13:08

@smurfy, the share buy back in 2023 was 300m and was factored in with the company's EPS of 37.7p. The share buy back for 2024 is exactly the same and therefore is also factored in the estimate of EPS of 41p. So it's already In the(my) calculation.

[smurfy2001] 12/3/2024 10:59

Have to take into account buybacks as well.

[joey52] 12/3/2024 10:24

Thanks for laying it out Muscletrade

[muscletrade] 12/3/2024 10:21

No one apart from UBS and BOA have come up with a valuation for the share price yet so I have done my own.

Trailing PE(for 2023) at today's share price of 469 and EPS of 37.7=12.44

This is a relatively modest PE for a company now in growth mode which the company have themselves confirmed by their 2023 results and also by increasing their capital generation from 1.467 to 2.0 billion

I have assumed that this translates into EPS of 41p for 2024(it could be slightly less or slightly more but is consistent with the improvement in 22/2023.

In the first instance I assume there is no improvement to the trailing PE for 2023
that provides (41 X 12.44)= share price of 510p

if there is a modest improvement to the PE to 13.0 (41 x 13.0) =SP of 533p

if there is a larger improvement to the PE to 13.5 (41 x 13.5) =SP of 554p

My understanding is that the PE of the higher valued insurance companies is closer to 18 than 13.5 so it doesn't seem to me unreasonable that the market might begin to recognise the progress underway and price in a higher PE. (one hopes, but it seems entirely logical).

Conclusion....even allowing for no improvement in PE the share price should be around 510p based upon what AV have already forecast.

If the market recognise that there should be a higher valuation based on growth forecasts then a share price of 554p is hardly expensive when compared to peer group with higher PEs.

One of the metrics that has held Av back is the pretty dismal ROE.
which was only 9.9% in 2022. this increased 48% to a more respectable 14.7% in 2023 and should increase again in 2024....which in turn should also support a higher PE valuation.

Please feel free to offer comments(please be kind, in fact I would welcome them

[carpingtris] 11/3/2024 19:41

Pi$$ take ain't it.. are brokers reports actually worth anything? Do they invest on the back of there upgrades? Or just push it to unsuspecting folk.

Hopefully the buybacks will absorb shares from the weaker holders.

[whatsup32] 11/3/2024 19:15

Berenberg raises Admiral share price from 2961 to 2973 . Admiral finished up 4.86%

Av had two raised recommendations and finished down

[muscletrade] 11/3/2024 15:00

Meanwhile we have two Sprice forecasts since results. UBS today(thanks Skinny) and BOA on Friday (540p).
Should be more to come.

[muscletrade] 11/3/2024 14:02

Off topic waring
I note Robert Peston has caused a bit of a stir by revealing (by mistake of course) the Ethereum code on TV...it is now all over the internet. My sister called to ask if it was a good idea ???? what could possibly go wrong?

Peston has now come out and said it is a fake!!!!

[whatsup32] 11/3/2024 12:33

Briton is second only to US for buyouts of foreign firms.

Counter argument as to why British firms are taken over by foreign firms

hxxps://www.spectator.co.uk/article/why-british-firms-keep-getting-bought-out-by-foreign-investors/

Don't blame the foreigners for buying cheap U.K. companies. They see value where British don’t .

Enough said…

[lord gnome] 11/3/2024 12:05

I suppose it was inevitable that someone would accuse me of being xenophobic. Sad but inevitable. What I really want is a strong and thriving British economy. We don't get to be masters of our own fate if we flog off everything on the cheap. Look on any share forum and you will always find some fool hoping for a bid to provide a quick profit.

[unastubbs] 11/3/2024 11:56

Yes but realistically the only potential buyer is going to be from overseas

[spud] 11/3/2024 11:44

whatsup - Perhaps I should clarify.

I don't want to see AV sold off to any entity foreign or otherwise. It's worth more to me (and I suspect others) as a successful growing business with an incremental yield than any short term profit that might result from a sale.

spud

[cwa1] 11/3/2024 10:47

Also:-

Bank of America raises Aviva price target to 540 (490) pence - 'buy'

[skinny] 11/3/2024 10:08

FWIW :- UBS raises Aviva price target to 555 (515) pence - 'buy'

[whatsup32] 11/3/2024 09:47

Isolationism.....

[muscletrade] 11/3/2024 09:36

Cadburys.....