Aviva PLC's (LSE:AV.) trading update, out earlier today, received an upbeat assessment from Panmure following its nine-month trading update and confirmation of new targets after completing the Direct Line Group acquisition in July.
The broker said management now expects operating EPS to grow at an 11% CAGR between 2025 and 2028, with return on equity rising to above 20% by 2028. Meanwhile, Aviva's FY25 RoE guidance is pitched at 17%.
Panmure highlighted a material upgrade to cost synergies. The target has been increased from £125 million to £225 million by 2028. Capital synergies were described as significantly ahead of expectations at more than £500 million by the end of 2026. According to Panmure, it had previously been assumed at only around £300 million.
Share buybacks are due to resume in 2026 at a level at least 14% higher to reflect the enlarged share count, and this implies around £350 million of buybacks next year, with management pointing to regular programmes thereafter.
The final 2025 dividend will increase by at least 10%, the broker highlighted, followed by 'mid-single-digit' growth.
Although Panmure is upbeat, in London, Aviva shares fell some 5.4% on Thursday, changing hands at 655.16p.
Panmure repeated a 'Buy' recommendation with a 543p price target.