David Barma, an analyst from Bank of America Securities, reiterated the Buy rating on Aegon NV. The associated price target remains the same with €7.50.
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David Barma has given his Buy rating due to a combination of factors surrounding Aegon NV’s strategic initiatives and financial outlook. The company is undergoing a significant transformation, planning to relocate to the US and rebrand as Transamerica by 2028. This strategic move, while costly, is expected to enhance cash and capital generation, despite conservative targets that might initially seem disappointing.
Furthermore, Aegon is actively working on de-risking its US operations, which involves reinvesting excess cash to mitigate risks associated with its reinsurance transactions. This strategy is anticipated to result in an uplift in operating capital generation. Additionally, while the dividend per share growth target is set at over 5% annually from 2025, there is room for higher growth, aligning with consensus forecasts of around 10%. The potential review and possible sale of its UK business, considered non-core, could also positively impact investor sentiment. Overall, despite conservative earnings targets, the strategic measures and capital management efforts support a positive outlook for Aegon NV.
In another report released on November 26, UBS also maintained a Buy rating on the stock with a €7.20 price target.