Broker snap: Panmure downgrades Standard Life, sees better value elsewhere

13th Mar 2012 11:27

While Panmure Gordon says that Standard Life's full-year results were good and ahead of expectations, the broker had downgraded its rating on the insurance giant from buy to hold.Standard Life reported an IFRS operating profit of £544m, up 28% year-on-year and 14% ahead of Panmure's and consensus forecasts of £476m, driven by the UK business. Furthermore, the dividend of 13.8p per share (up 6.2% on the previous year) was also slightly better than expected."We turned buyers of Standard Life following better than anticipated interim results in August and on the basis that the shares had been oversold," said analyst Barrie Cornes."Since then, the shares have rallied 37% in absolute terms and are now trading in line with our 240p target price," he said.With the shares are trading at a 25% discount to 2011 enterprise value with a 5.8% dividend yield, the broker believes that there is better value elsewhere in the life sector. "In particular we think that Pru and Aviva offer greater upside potential with similar/greater dividend yields."BC