Divi growth and staying clear of more debt are just as good for me.I'm still unconvinced about the DLG gig, but I'm just a punter. |
Joe Say
They said no BuyBack in 2025 |
I thought they had specifically stated no buybacks given the acquisition funds needed
Is that right? |
Anymore broker upgrades. Loved that JP Morgan one. SIX POUND 15 PENCE!! Bring it on |
That’s good enough for me 1robbob, thank you. |
I still think that there will be no Share Buyback in 2025. So just a mid single digit % increase in the divi, say 5%
Share Buy Back will resume in 2026
No Special Dividends - BOD only interested in repeatable returns to shareholders |
It's Cuckold isn't it? |
Is 1rob about? He was on the money when the cash return was going through. Does this upgrade effectively cancel the chance of more buy backs/ specials? |
Nice rise, especially this far out from what I reckon will be a good pre divi rise. |
I do like the comment of expected EPS growth 12% in 2026/2027.... music to my ears :-) |
 On Wednesday, JPMorgan (NYSE:JPM) increased the rating of Aviva (LON:AV) Plc (AV/:LN) (OTC: AIVAF) stock from Neutral to Overweight and raised the price target to GBP 6.15, up from the previous GBP 5.55. The upgrade comes in the wake of Aviva's proposed acquisition of DLG, which JPMorgan believes will be approved by DLG shareholders due to the appealing offer. The deal is not expected to face regulatory issues, given the competitive landscape of the UK personal lines insurance market.
JPMorgan predicts the acquisition will be beneficial for Aviva, citing the deal's strong accretive nature, its potential to enhance Aviva's insurance mix with a higher multiple non-life segment, and its ability to improve the company's scale in the UK property and casualty (P&C) insurance sector. Aviva is poised to become the second-largest financial services brand in the UK, which could lead to significant revenue synergies, especially considering Aviva's proven cross-selling capabilities.
JPMorgan has also increased its earnings per share (EPS) estimates for Aviva by approximately 10-12% for the years 2027 and 2028. The firm notes that there is a substantial upside to the consensus EPS, projecting an increase of 6-17% over the estimates for 2026 and 2027. According to the analyst, Aviva's stock is trading at roughly 8.3 times its projected 2026 earnings, compared to its UK life insurance peers at around 9 times and European composite insurers at approximately 10 times.
The analyst also mentioned that if the acquisition of DLG does not proceed, it may initially be perceived negatively by the market. However, in such an event, Aviva would still have the opportunity to allocate its surplus capital elsewhere or enhance capital returns to shareholders to mitigate any adverse reactions.
On Wednesday, UBS raised its price target on Aviva (LON:AV) Plc (AV/:LN) (OTC: AIVAF) shares to GBP6.75, up from GBP5.90, while sustaining a Buy rating on the stock. The adjustment comes amid expectations of a significant earnings boost from the potential acquisition of Direct Line (LON:DLGD) (DLG). UBS analysts predict the deal could be more than 12% accretive to Aviva's earnings per share (EPS), a figure not yet reflected in the current stock price.
The firm's analysts noted that the acquisition is poised to expedite Aviva's shift towards business lines that are not only capital light, accounting for over 75% of the pro forma mix, but also yield a higher return on capital, exceeding 20%. The focus of UBS's analysis is on the potential value accretion resulting from the acquisition. They foresee an upside to the company's anticipated EPS accretion of around 10%, with their estimates suggesting a figure greater than 12%.
The optimism from UBS is fueled by the expectation of achieving cost synergies in excess of GBP200 million, which surpasses the company's own guidance of GBP125 million. Despite anticipating a negative impact of approximately 9 percentage points on solvency due to the deal, after accounting for predicted capital synergies, the overall financial outcome is expected to be favorable.
UBS anticipates that the transaction will yield an attractive internal rate of return (IRR) and return on investment (ROI) of around 16%. This assessment underscores the potential financial benefits Aviva could reap from the successful completion of the Direct Line acquisition. The new price target reflects the confidence in Aviva's strategic direction and the anticipated positive impact on its financial performance. |
6+ year high @513.20p. |
5% return on DLG, merger arbitrage that worked. |
Wow a nice upswing .. The FY results in FEB I am sure are the usual CEO Stella variety GLA |
I’ll drink to those updates … though I give them no credence as they’re so often wrong! |
*UBS RAISES AVIVA PRICE TARGET TO 675 (590) PENCE - 'BUY' |
*JPMORGAN RAISES AVIVA TO 'OVERWEIGHT' (NEUTRAL) - PRICE TARGET 615 (555) PENCE |
Rongestrich,
Almost certainly.............yes! :-)
NMRN |
Once the savings are made will there be a special, more buy back, or another predatory bid? |
Re the purchase of DL. In my experience, combining two companies in the same business can deliver value from eliminating duplication. It's vertical or horizontal acquisitions pushing into poorly understood new markets that destroy value. |
I share Spud's worries but on balance I side with cfro. Ms Blanc could have the drive and skill to make it work |
I think this is an excellent deal myself.
The piece in this weeks IC was interesting describing the need for less capital tied-up in tier 1 as the cherry on top as the business moves away from life insurance and into home and motor insurance.
Under Ms Blanc we can expect this surplus capital to be paid-out to shareholders in the form of higher dividends and more buy-backs. |
I'm personally not comfortable with this merger but time will tell.spud |
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