Aviva PLC (LSE:AV.) has completed its strategic transformation in the UK following its agreed acquisition of Direct Line Group, and stockbroker Peel Hunt has pitched a 'buy' rating with a 755p target price.
The broker, in a note, said the L&G deal reshaped Aviva’s position in UK personal and commercial lines and shifted attention to execution.
Peel Hunt sees integration as the next catalyst, with delivery expected by FY28E. The broker also warned that the UK P&C market has moved into a tougher part of the cycle. Even so, it believes the reorganisation can work and expects underwriting margins to move structurally higher over time.
Peel Hunt also compared Aviva’s Life business with listed peers and said it is more diversified, with a stronger growth outlook than Legal & General and Phoenix. It forecasts 5.3% average assets under administration growth over the next decade, supported by Workplace pensions and broader savings.
The broker expects annuities and the run-off Heritage book to underpin profits as pension savings scale. Peel Hunt estimates 14% all-in ROCE and a 10-year average 18% RoE, alongside c.7% adjusted EPS growth per year and 6% annual growth in the basic dividend.