PNXGF - Aviva Undervalued As It Nears Completion Of Its Corporate Makeover
- Aviva has largely finished its corporate restructure, generating GBP 7.5B from the sale of non-core businesses and refocusing around its UK Life (protection and retirement products) and P&C operations.
- Bulk annuities do offer some opportunities for growth, but management has prioritized quality over volume there, and overall earnings growth is likely to be in the 4% range.
- Aviva's new model should be less volatile and slower-growing, but capable of funding increasing capital returns to shareholders even after a big return of capital in 2022.
- Core cash earnings growth of 4% can support a fair value about 20% above today's price.
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Aviva Undervalued As It Nears Completion Of Its Corporate Makeover