RSA Insurance chopped to sell from neutral by Goldman Sachs
RSA Insurance got the chop at Goldman Sachs on Monday with its rating now down to ‘sell’ from ‘neutral’.
FTSE 100
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FTSE 350
4,334.00
17:14 18/04/24
FTSE All-Share
4,290.02
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Insurance (non-life)
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17:14 18/04/24
RSA Insurance Group Limited
684.20p
16:54 28/05/21
The bank said RSA’s full year 2014 results confirmed that despite making progress on restructuring and its balance sheet clean-up, headwinds to operating earnings have worsened materially.
“Despite our expectations of limited growth in tangible equity over the next two years, we fail to see RSA reaching the bottom of its 12%-15% return on tangible equity target range until 2017, when full restructuring benefits start to materialise,” said Goldman.
It added that RSA’s pension revaluation is an overhang that makes a near-term increase in capital returns unlikely and also hinders any potential break-up of the group. “We lower our 2015-18 EPS (forecasts) by 20%-25% and our 12-month price target to 385p from 445p,” added the bank.