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Investing.com - Morgan Stanley (NYSE:MS) has resumed coverage of Aviva Plc (LON:AV) (OTC:AIVAF) with an Overweight rating and a price target of GBP6.80 following the company’s acquisition of Direct Line (LON:DLGD).
The investment bank’s decision comes after Aviva completed its acquisition of Direct Line, which Morgan Stanley notes has broadened the insurance company’s market reach and increased its focus on capital-light earnings.
Morgan Stanley believes the transaction has enhanced Aviva’s diversification, positioning it for comparison with large-cap multi-line insurers.
The firm acknowledges that Aviva still lacks the same level of property and casualty insurance diversification and balance sheet strength as its Continental European counterparts.
Despite these limitations, Morgan Stanley maintains that these factors are "more than reflected in the current discounted valuation," supporting its Overweight stance on the stock.
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