Lisa Cook sues Trump over firing attempt, emergency hearing set
Investing.com - Citi has resumed coverage of Aviva PLC (LON:AV), a prominent insurance player with a market capitalization of $25.91 billion, with a Neutral rating and a price target of GBP6.23, following a period when its rating was suspended.
The British insurance company’s shares have performed strongly year-to-date, rising 53.33% and trading near its 52-week high, which Citi believes has brought the valuation up to appropriate levels given recent developments. According to InvestingPro, the stock is currently trading close to its Fair Value, with a P/E ratio of 26.96x.
Aviva’s acquisition of Direct Line (LON:DLGD) Group (DLG) has rebalanced the company’s business mix toward property and casualty insurance, which now represents 54% of operating profit, with potential upside from capital and expense synergies over time.
The acquisition is expected to add approximately 11% to Aviva’s operating profit and about 10% to earnings per share on a full run-rate basis by 2027, though Citi has lowered its 2026 operating EPS forecast by 10% due to higher share count.
Citi estimates Aviva’s 2026 free cash flow yield at 8.4%, capital generation yield at 9.9%, and IFRS price-to-earnings ratio at 10.3x, with the GBP6.23 price target implying a 5% expected total return upside potential, including dividends.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.