Broker snap: Aviva restructuring a positive move

22nd Oct 2009 11:56

Panmure Gordon likes the look of the restructuring of its European businesses announced by insurer Aviva on Thursday.'In our view the strength and future potential of its European operations have been long overlooked and as such we believe that today's move is positive and will be taken well in the short/medium term,' Panmure analyst Barrie Cornes believes.The decision to combine 12 individual businesses will give Aviva additional muscle in Europe, there 'the potential market is huge and the demographics are attractive,' Cornes reckons.The broker has a target price of 526p for Aviva, and rates the shares a 'buy'. 'The valuation remains undemanding with Aviva trading on an IFRS [international financial reporting standards] 2009F [forecast] PE [price/earnings ratio] of 8.9x and a healthy dividend yield of 5.2% despite the cut at the interim stage.' the broker notes.