UBS has reiterated its ‘Buy’ recommendation on Prudential PLC, with the Swiss bank expecting the insurance and financial services firm to return around 16% of its market capitalisation to shareholders over the next three years.
The bank's analysts meanwhile, also raise their 12-month price target to 1,400p from 1,385p, with the increase reflecting a higher valuation for ICICI AMC following its listing.
The analysts also anticipate that cumulative earnings will grow some 25%, equivalent to an annual compound growth rate of 8%. And, UBS believes this underpins a potential total shareholder return of over 40%.
UBS analysts, in the note, said they anticipate 'small upside surprises' in Prudential’s FY25 results next month (18 March).
They expect positive variances in earnings, free cash flow, capital return and new business profit. The report notes Prudential continues to trade at a 28% valuation discount to peer AIA, broadly in line with the historical average of 31%.