Prudential and Standard Life boosted by Barclays note
Shares in insurers Prudential and Standard Life got a lift from Barclays, as it upgraded price targets on both stocks in its latest note on European insurance.
Abrdn
136.20p
16:40 19/04/24
FTSE 100
7,893.61
16:25 19/04/24
FTSE 350
4,341.44
16:40 19/04/24
FTSE All-Share
4,295.49
16:25 19/04/24
Life Insurance
5,741.37
16:40 19/04/24
Prudential
722.00p
16:45 19/04/24
The bank increased Prudential’s target to 1,889p from 1,877p, pointing to the company’s earnings on 11 August, which will be chief executive Mike Wells’ first chance to set out his view on the strategic direction of the company and what can be expected under his leadership.
“We expect the earnings themselves to be strong, as Prudential is benefiting from FX tailwinds in the US and in Asia, which should add around 3% to earnings,” it said.
Barclays, which rates the stock at ‘overweight’, said it sees Prudential continuing to grow earnings at 12% compound annual growth rate and cash remittance at 15% CAGR over the next 5 years, buoyed by Asian growth and an increasingly cash-generative US business.
“At 14 times our 2015 earnings per share estimate, we see Prudential as offering strong, quality growth at a very reasonable price.”
The bank raised Standard Life’s target to 546p from 520p, saying it expects the company’s results on 4 August to show a solid set of earnings, boosted by continued strong inflows of its flagship fund, GARS.
Barclays rates the stock at ‘equalweight’, saying Standard Life owns some of the most attractive assets in UK Life insurance, while the sale of its Canadian business brings forward the mix-shift towards its key strengths.
“However, our concern is that momentum in net flows has not reached its potential, whilst the UK back-book will likely temper earnings growth over the medium term.”
At 13:03, Prudential shares were up 1.9% at 1,596p, while Standard Life was 4% higher at 451.25p.