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13 Aug 2021 | 08:08

Berenberg stays at 'buy' on Aviva

(Sharecast News) - Analysts at Berenberg took a fresh look at insurance firm Aviva on Friday, stating the firm's capital return was "a compelling reason" to buy. Berenberg, which kept its 478.0p target price on the stock unchanged, said Aviva's clarification on its intention to return a minimum of £4b.0n of excess capital to shareholders by the middle of 2022 put it "at the top of the class" for shareholder returns over the next 12 months.

The German bank noted this was equivalent to roughly 25% of the firm's current market cap, while investors will also receive the ordinary dividend yield of roughly 5.7%.

"We believe that this is a fairly compelling reason to own the shares that are still trading at sub 10x 2022E earnings," said Berenberg, which also reiterated its 'buy' rating on the stock.

"Aviva offers significant upside from current levels as it trades on low valuation multiples on an IFRS basis. However, we believe the market will look for further progress on achieving its targets before rerating the shares."
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