On Monday, JPMorgan (NYSE:JPM) adjusted its stance on Aviva (LON:AV) Plc (AV/:LN) (OTC: AIVAF), downgrading the stock from Overweight to Neutral and reducing the price target to GBP5.50 from GBP5.75.
The firm stated that while it holds Aviva's management team and CEO Amanda Blanc in high regard for their successful business turnaround and balance sheet improvement, the stock no longer provides a premium total capital return compared to its UK life insurance peers.
The bank noted Aviva's performance, which has been strong relative to the sector, but pointed out that the current valuation mirrors that of its competitors.
Aviva's stock is trading at approximately 9 times its estimated 2025 earnings per share (EPS) and around 1 times its estimated 2024 comprehensive book value (BV), aligning it with other UK life insurance companies.
The revision in Aviva's rating reflects a recalibration of expectations based on market comparisons and the company's recent trajectory. JPMorgan also decided to remove Aviva from its Analyst Focus List, indicating a shift in the firm's outlook towards the stock.
Despite the downgrade, JPMorgan's commentary suggests a continued respect for Aviva's leadership and recent financial progress. The change in rating is primarily attributed to the stock's valuation and its relative position in the market when compared to its industry counterparts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.