Aviva plc (AV) AI Stock Analysis

• Market Cap: £16.58B
• Dividend Yield: 7.64%
• Average Volume (3M): 8.33M
• Price to Earnings (P/E): 26.4
• Beta (1Y): 1.05
• Revenue Growth: -1.13%
• EPS Growth: -38.11%
• Country: UK
• Employees: 29,091
• Sector: Financial
• Sector Strength: 77
• Industry: Insurance - Diversified
• EPS (TTM): 0.25
• Shares Outstanding: 2,678,835,400
• 10 Day Avg. Volume: 6,933,011
• 30 Day Avg. Volume: 8,326,669
• PEG Ratio: 0.03
• Price to Book (P/B): 1.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.01
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £629.66
• Price Target Upside: 1.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 80 Outperform
• Price Target: 702.00p ▲(13.63%Upside)

Aviva plc's strong cash flow and technical performance are key strengths, supported by a positive earnings call that highlights strategic growth and acquisitions. Despite a high P/E ratio, the attractive dividend yield enhances the stock's appeal.

Positive Factors

Earnings Impact

The acquisition is expected to be EPS accretive from the first year onwards.

Strategic Acquisition

Aviva's proposed acquisition of DLG is considered a good strategic fit, driven by promising scale benefits and synergies.

Target Price Increase

The target price for Aviva has been increased by 5% to 565p, with an upgrade to Overweight, suggesting potential upside.

Negative Factors

Combined Operating Ratio

General Insurance undiscounted COR (uCOR) was 99.5%, 20bps worse yoy, driven by heavy cat activity in Canada.

Solvency Ratio

Aviva's solvency ratio stood at 195%, 10pts below 1H24, impacted by economic impacts and interim dividend.

Aviva plc Business Overview & Revenue Model

Company Description

Aviva plc provides various insurance, retirement, investment, and savings products in the United Kingdom, Ireland, Canada, and internationally. The company offers life insurance, long-term health and accident insurance, savings, pension, and annuity products, as well as pension fund business and lifetime mortgage products. It also provides insurance cover to individuals, small and medium-sized businesses for risks associated with motor vehicles and medical expenses, as well as property and liability, such as employers' and professional indemnity liabilities. In addition, the company provides investment management services for institutional pension fund mandates; and manages various retail investment products, including investment funds, unit trusts, open-ended investment companies, and individual savings accounts for third-party financial institutions, pension funds, public sector organizations, investment professionals, and private investors. It markets its products through a network of insurance brokers, as well as MyAviva platform. The company was formerly known as CGNU plc and changed its name to Aviva plc in July 2002. Aviva plc was founded in 1696 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Aviva plc generates revenue primarily through the underwriting of insurance policies and the management of assets. The company's key revenue streams include premiums collected from policyholders for life and general insurance products, which cover areas such as health, motor, home, and commercial insurance. Additionally, Aviva earns income through the investment of premiums in various financial instruments, generating returns that contribute to the company's earnings. The asset management division provides investment products and services, collecting fees based on the assets under management. Strategic partnerships and collaborations with financial institutions and brokers also play a significant role in expanding Aviva's market reach and customer base, further supporting its revenue growth.

Aviva plc Financial Statement Overview

Summary

Aviva plc shows strong cash flow management and a stable leverage position. Despite challenges in net income and profitability, the firm maintains a solid equity base and cash reserves, enabling it to navigate industry fluctuations effectively.

Income Statement

Aviva plc has shown a fluctuating revenue trend with a slight decline in 2024. The gross profit margin remains stable due to consistent revenue recognition policies. However, the net profit margin has decreased significantly compared to 2023 due to lower net income. The company had positive EBIT and EBITDA margins in 2023 but faced challenges in 2024 due to a lack of EBIT, impacting overall profitability.

Balance Sheet

The balance sheet indicates moderate leverage with a relatively stable debt-to-equity ratio. The company maintains a strong equity position, although it has decreased over the years. Aviva's equity ratio reflects a healthy portion of assets financed by shareholders. Despite the slight increase in total debt, the company's overall financial position remains stable with sufficient equity backing.

Cash Flow

Aviva plc's cash flow statement exhibits a strong free cash flow position in 2024, recovering significantly from negative cash flows in 2023. The company demonstrates effective cash management with a high operating cash flow to net income ratio. This robust cash flow generation provides flexibility for strategic investments and debt management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
31.76B	32.92B	-26.79B	32.99B	30.56B
	Gross Profit
31.76B	33.95B	16.20B	32.99B	31.08B
	EBIT
997.00M	1.44B	16.18B	556.00M	2.88B
	EBITDA
1.58B	2.43B	-887.00M	1.33B	2.61B
	Net Income Common Stockholders
683.00M	1.08B	-1.07B	416.00M	2.06B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
23.48B	17.27B	22.50B	12.48B	16.90B
	Total Assets
353.88B	328.84B	302.26B	343.44B	466.52B
	Total Debt
6.89B	7.37B	8.57B	8.42B	11.13B
	Net Debt
-16.59B	-9.91B	-13.94B	-4.06B	-5.78B
	Total Liabilities
345.26B	319.24B	289.86B	323.99B	445.96B
	Stockholders Equity
8.30B	8.79B	12.09B	19.20B	19.55B
Cash Flow		Free Cash Flow
8.27B	-3.08B	3.85B	3.19B	8.91B
	Operating Cash Flow
8.45B	-2.73B	3.95B	3.30B	9.05B
	Investing Cash Flow
162.00M	-350.00M	11.13B	-6.58B	-12.70B
	Financing Cash Flow
-2.49B	-1.82B	-5.47B	-3.91B	-339.00M

Aviva plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 617.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:AV, the sentiment is Positive. The current price of 617.8 is above the 20-day moving average (MA) of 614.05, above the 50-day MA of 580.76, and above the 200-day MA of 499.47, indicating a bullish trend. The MACD of 8.55 indicates Positive momentum. The RSI at 60.01 is Neutral, neither overbought nor oversold. The STOCH value of 69.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:AV.

Aviva plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AV	80 Outperform	£16.58B	26.42	5.48%	7.64%	-1.13%	-38.11%
ADM	79 Outperform	£10.51B	15.84	56.17%	8.28%	34.86%	95.18%
PRU	70 Outperform	£23.02B	13.58	12.68%	2.74%	-17.12%	30.62%
Sector *	67 Neutral	$16.17B	10.98	9.72%	4.07%	11.95%	-10.49%
PHNX	66 Neutral	£6.56B	―	-60.34%	8.32%	-6.33%	―
DLG	65 Neutral	£4.00B	27.39	5.97%	3.25%	26.11%	-29.43%
LGEN	63 Neutral	£14.50B	88.06	4.06%	9.01%	-21.56%	-61.14%