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Aviva plc (GB:AV)
LSE:AV
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Aviva plc
(LSE:AV)
Rating:80Outperform
Price Target:
702.00p
▲(9.28%Upside)
Positive Factors
Acquisition
The completion of the Direct Line acquisition broadens Aviva's reach and increases its focus on capital-light earnings.
Earnings
Aviva is expected to generate over 70% of earnings from capital-light streams, making it a preferred choice among domestic UK coverage.
Negative Factors
Balance Sheet
The company's valuation discount is significant, offering more than what accounts for a 'weaker' balance sheet.
Aviva plc (AV) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£19.33B
Dividend Yield5.59%
Average Volume (3M)7.16M
Price to Earnings (P/E)27.0
Beta (1Y)1.05
Revenue Growth-1.13%
EPS Growth-38.11%
CountryUK
Employees29,091
SectorFinancial
Sector Strength73
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)0.25
Shares Outstanding3,057,053,500
10 Day Avg. Volume5,538,115
30 Day Avg. Volume7,158,913
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)1.28
Price to Sales (P/S)0.00
P/FCF Ratio4.01
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£666.50Price Target Upside3.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Aviva plc Business Overview & Revenue Model
Company DescriptionAviva plc is a leading British multinational insurance company headquartered in London, England. The company operates primarily in the United Kingdom, Ireland, and Canada, offering a wide range of insurance products including life insurance, general insurance, and asset management services. Aviva focuses on providing solutions for both individual and corporate clients, helping them manage risk and protect their financial futures through comprehensive insurance coverage and investment opportunities.
How the Company Makes MoneyAviva plc generates revenue primarily through the underwriting of insurance policies and the management of assets. The company's key revenue streams include premiums collected from policyholders for life and general insurance products, which cover areas such as health, motor, home, and commercial insurance. Additionally, Aviva earns income through the investment of premiums in various financial instruments, generating returns that contribute to the company's earnings. The asset management division provides investment products and services, collecting fees based on the assets under management. Strategic partnerships and collaborations with financial institutions and brokers also play a significant role in expanding Aviva's market reach and customer base, further supporting its revenue growth.
Aviva plc Earnings Call Summary
Earnings Call Date:Feb 27, 2025
(Q4-2024)
| % Change Since: 28.52%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Aviva's strong financial performance, growth across various segments, and strategic acquisitions that have positioned the company for future gains. Despite challenges in the Canadian market due to severe weather, the overall financial metrics and strategic moves indicate a positive trajectory.Q4-2024 Updates
Positive Updates
Strong Financial Performance
Operating profit increased by 20% to nearly £1.8 billion and underlying own funds generation rose 18% to £1.5 billion. Cash remittances increased to £2 billion, and return on equity was 13.6% on a Solvency II basis. Capital position remains strong at 20%.
Dividend Increase
A final dividend of 23.8p per share was announced, with the total dividend per share up 7% year-on-year.
Growth in U.K. and Ireland General Insurance
Achieved 16% growth in premiums, with personal lines growing 22% and commercial lines 12%.
Canadian Market Performance
Delivered double-digit growth despite challenging CAT season, with a leading claims net promoter score.
Wealth Segment Success
Assets on the adviser platform reached £50 billion, with overall assets nearing £200 billion.
Record Retirement Segment
Delivered record bulk purchase annuity volumes with continued support on asset origination.
Strategic Acquisition and Integration
Proposed acquisition of Direct Line expected to create a leader in U.K. personal lines with £125 million in cost synergies.
Negative Updates
Impact of Canadian Weather Events
Canada experienced the worst insured year for weather on record with over CAD 8.5 billion in losses, impacting operating profit.
Decline in Operating Funds Generation
Total operating funds generation was 4% lower in 2024 due to the prior year's benefit from the partnership extension with Diligenta and FNZ.
Company Guidance
During the call, Aviva provided guidance on several key metrics, emphasizing their strong financial performance in fiscal year 2024 and strategic plans for future growth. Operating profit increased by 20% to nearly £1.8 billion, while underlying own funds generation (OSG) rose 18% to £1.5 billion. They announced a final dividend of 23.8p per share, resulting in a total dividend per share up 7% year-on-year. Return on equity was reported at 13.6% on a Solvency II basis, with a robust capital position at 20%. Aviva also highlighted their achievements in the U.K. and Ireland General Insurance segment with 16% growth, and double-digit growth in Canada, supported by a leading claims net promoter score. The wealth division reached £50 billion in assets on the adviser platform, cementing their number one position in the U.K. Plans for the proposed acquisition of Direct Line were detailed, projecting £125 million in cost synergies and significant capital benefits, further enhancing shareholder distribution. The company remains on track to meet its 2026 targets, with ambitions to continue delivering strong shareholder returns, having returned £10 billion of capital over the past 4.5 years.Aviva plc Financial Statement Overview
Summary
Aviva plc shows strong cash flow management and a stable leverage position. Despite challenges in net income and profitability, the firm maintains a solid equity base and cash reserves, enabling it to navigate industry fluctuations effectively.Income Statement
Aviva plc has shown a fluctuating revenue trend with a slight decline in 2024. The gross profit margin remains stable due to consistent revenue recognition policies. However, the net profit margin has decreased significantly compared to 2023 due to lower net income. The company had positive EBIT and EBITDA margins in 2023 but faced challenges in 2024 due to a lack of EBIT, impacting overall profitability.72
Positive
Balance Sheet
The balance sheet indicates moderate leverage with a relatively stable debt-to-equity ratio. The company maintains a strong equity position, although it has decreased over the years. Aviva's equity ratio reflects a healthy portion of assets financed by shareholders. Despite the slight increase in total debt, the company's overall financial position remains stable with sufficient equity backing.80
Positive
Cash Flow
Aviva plc's cash flow statement exhibits a strong free cash flow position in 2024, recovering significantly from negative cash flows in 2023. The company demonstrates effective cash management with a high operating cash flow to net income ratio. This robust cash flow generation provides flexibility for strategic investments and debt management.85
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 31.76B | 32.92B | -26.79B | 32.99B | 30.56B |
| Gross Profit | 31.76B | 33.95B | 16.20B | 32.99B | 31.08B |
| EBITDA | 1.58B | 2.43B | -887.00M | 1.33B | 2.61B |
| Net Income | 683.00M | 1.08B | -1.07B | 416.00M | 2.06B |
Balance Sheet | |||||
| Total Assets | 353.88B | 328.84B | 302.26B | 343.44B | 466.52B |
| Cash, Cash Equivalents and Short-Term Investments | 23.48B | 17.27B | 22.50B | 12.48B | 16.90B |
| Total Debt | 6.89B | 7.37B | 8.57B | 8.42B | 11.13B |
| Total Liabilities | 345.26B | 319.24B | 289.86B | 323.99B | 445.96B |
| Stockholders Equity | 8.30B | 8.79B | 12.09B | 19.20B | 19.55B |
Cash Flow | |||||
| Free Cash Flow | 8.27B | -3.08B | 3.85B | 3.19B | 8.91B |
| Operating Cash Flow | 8.45B | -2.73B | 3.95B | 3.30B | 9.05B |
| Investing Cash Flow | 162.00M | -350.00M | 11.13B | -6.58B | -12.70B |
| Financing Cash Flow | -2.49B | -1.82B | -5.47B | -3.91B | -339.00M |
Aviva plc Technical Analysis
Positive
642.40
Price Trends
620.40
Positive
579.28
Positive
521.52
Positive
Market Momentum
7.05
Negative
61.60
Neutral
72.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:AV, the sentiment is Positive. The current price of 642.4 is above the 20-day moving average (MA) of 629.47, above the 50-day MA of 620.40, and above the 200-day MA of 521.52, indicating a bullish trend. The MACD of 7.05 indicates Negative momentum. The RSI at 61.60 is Neutral, neither overbought nor oversold. The STOCH value of 72.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:AV.
Aviva plc Risk Analysis
Aviva plc disclosed 15 risk factors in its most recent earnings report. Aviva plc reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aviva plc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | £19.33B | 26.98 | 5.48% | 5.59% | -1.13% | -38.11% | |
78 Outperform | £10.12B | 15.26 | 56.17% | 3.58% | 34.86% | 95.18% | |
70 Outperform | £24.04B | 14.24 | 12.68% | 2.03% | -17.12% | 30.62% | |
67 Neutral | $17.09B | 11.28 | 9.28% | 3.81% | 11.08% | -4.02% | |
62 Neutral | £6.48B | ― | -60.34% | 8.33% | -6.33% | ― | |
61 Neutral | £14.43B | 88.37 | 4.06% | 6.85% | -21.56% | -61.14% |
* Financial Sector Average
Performance Comparison
GB:AV
Aviva plc
639.00
173.97
37.41%
GB:ADM
Admiral
3,312.00
722.18
27.89%
GB:LGEN
Legal & General
254.90
43.02
20.30%
GB:PHNX
Phoenix Group Holdings
649.00
153.08
30.87%
GB:PRU
Prudential
938.20
254.89
37.30%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.