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From: Denc 🗡
Aviva , lovely stuff…. Has now joined the exclusive list of shares that have made your hero a nice round sum. Investing.com -- Morgan Stanley upgraded British insurer Aviva to “overweight” from “equal-weight” rating on Thursday and raised its price target to 820 pence from 700 pence, citing scope for stronger UK insurance earnings as past motor insurance pricing actions feed through to profitability. The brokerage expects Aviva’s UK & Ireland general insurance operating profit to reach £1.46 billion in 2027, about 7% above consensus estimates, mainly reflecting stronger expected margins in personal insurance. The business accounts for about 45% of Aviva’s group business-unit operating earnings, making its performance a significant driver of the brokerage’s more positive earnings outlook. Morgan Stanley forecasts a UK personal insurance claims ratio of 59.5% in 2027, compared with the consensus estimate of 60.8%. For 2026, it expects the ratio to be 60%, against consensus at 60.6%. A lower claims ratio indicates that a smaller share of premiums is being absorbed by claims, supporting underwriting profitability. The expected improvement reflects pricing actions at Direct Line Group (DLG), whose motor insurance business Aviva acquired. Morgan Stanley said DLG’s motor written combined operating ratio improved by more than 10 percentage points between June 2025 and June 2026. The brokerage expects more of the benefit from those actions to emerge in earned margins during the second half of 2026 as the revised prices feed through. For the second half of 2026, Morgan Stanley forecasts a UK personal insurance claims ratio of 59.9%, compared with consensus at 61.1%. It expects the benefit from DLG’s pricing actions to be partly offset by pressure on UK home insurance margins and the normalisation of favourable weather conditions recorded in the first half. Its assumptions include home claims inflation of about 5%, against pricing increases of about 4%. Morgan Stanley expects Aviva’s 2026 full-year results to provide clearer evidence of improving UK personal insurance margins and potentially prompt upward revisions to market earnings forecasts. It estimates that its group earnings forecasts are 2%-4% above consensus over 2026-28, with UK general insurance the main source of differentiation. The brokerage forecasts operating earnings per share of about 78 pence in 2028, 2% above consensus at 76.5 pence. That implies annualised earnings growth of about 12.2% between 2025 and 2028, compared with consensus growth of 11.6% and Aviva’s 11% ambition. Morgan Stanley also expects UK & Ireland general insurance premiums to grow about 5% annually in 2027 and 2028, marginally ahead of consensus. However, it remains cautious on commercial insurance, forecasting flat gross written premiums in those years and modest underlying claims-ratio deterioration. The new 820-pence price target implies a valuation of about 10.5 times forecast 2028 operating earnings per share, below the 12-14 times multiples at which most European insurance peers trade. Morgan Stanley estimates Aviva’s total capital-return yield at about 8% in 2027, including dividends and share buybacks, and said the valuation does not fully reflect the improving earnings outlook.

Current Thread	Author	Time
Aviva , lovely stuff…....[more]	Denc 🗡	13:39:11
>> still have mine bought at £4, not nearly enough of them of course	Alfie Noakes	14:31:12
>> Well done , mine were that or less too.	Denc 🗡	15:26:43

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