UBS has thrown its weight behind M&G PLC (LSE:MNG) ahead of the half-year results after recently upgrading the stock to 'buy'
The Swiss bank's optimism centres on M&G’s asset management arm, where UBS expects net inflows to hit £1.7 billion.
That is nearly triple the consensus estimate, and it suggests the M&G is quietly winning new business while the sector wrestles with uncertainty.
Aviva PLC (LSE:AV.) remains a UBS favourite, though the real action is expected later this year.
All eyes will be on the November trading update, when Aviva’s management is set to provide more detail on its integration with Direct Line.
UBS thinks cost savings could exceed expectations, possibly reaching £220 million versus the official £125 million target, and forecasts that Aviva could deliver steady, double-digit earnings growth over the next few years as synergies kick in.
Legal & General is still under the microscope, with UBS highlighting the group’s persistent dividend payout worries.
However, an extra £50 million in capital generated from asset trading should give the company some breathing room, even as its payout ratio hovers above 100%.
UBS has lifted its share buyback forecast to £300 million for the year, citing steady new business and prudent asset strategy.
Phoenix Group Holdings PLC (LSE:PHNX), meanwhile, could benefit from recent market swings. UBS expects management actions to bring in £300 million for the half-year, with its solvency position continuing to improve; a welcome signal for investors focused on resilience in the sector.
UBS’s bottom line: M&G has momentum, Aviva is set for a crucial November, and both Legal & General and Phoenix have reasons for investors to pay attention as the results season unfolds.