Financial Trading Blog
Stock of the day 07/03/2016 – Aviva PLC
After Aviva’s long descent to £4.29 at the end of last September, reaching a nadir not seen since December 2013, things began to pick up for the multinational insurer, lifting all the way back above £4.80 towards the end of October. The stock was helped along by its third quarter update, with investors buoyed by the news that the continued integration of Friends Life into the Aviva-fold was going smoothly, despite a decent amount of scepticism surrounding the deal in the city, the company aiming to save £225 million in annual costs by 2017.
(Source: IT-Finance.com 07/03/2016)
Its rebound continued as 2015 began to wind down, with a drop across the start of December soon recovered, leaving Aviva to end the year at £5.18; a way away from its £5.75 highs, but nevertheless an improvement on its £4.90 start to the year.
However, the stock immediately began to suffer as 2016 got underway; plunging across January, by the middle of February Aviva was at 28 month low of £4, the rocky start to the year causing the company to completely lose whatever momentum it had gained around its third quarter results. Since then it has begun to recover once again, largely in line with the market’s broader rebound, climbing back to a current trading price of £4.66 (IT-Finance.com, 07/03/2016).
In terms of its full year figures, the weight of the recent flooding and the continued costs related to the Friends Life-acquisition are set to heavily impact the company’s pre-tax profits, with analysts expecting a 9.8% fall to £2 billion. However, it looks like that Friends Life purchase will yield results in other areas, Aviva set to reveal a 48.8% surge in revenue to £36.8 billion thanks to last April’s merger.
Aviva PLC has a consensus rating of ‘Buy’ with an average target price of £5.91.
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