Panmure upgrades Aviva after strong results, debt outlook

6th Mar 2014 10:32

The share price of insurance giant Aviva soared on Thursday after the company beat expectations with its 2013 results, with Panmure Gordon providing a lift as it upgraded its rating on the stock from 'hold' to 'buy'."We view these results as good with the numbers either in line or ahead of expectations across the board," said Analyst Barrie Cornes.Aviva reported an operating profit of £2,049m for last year, up 6% on 2012 and 3% ahead of the consensus estimate of £1,988m. The figure also beat Panmure's forecast, which was above consensus at £1,999m.Full-year sales of £20,532m were also 4% ahead of the market's estimate.Cornes highlighted Aviva's internal debt position which had reduced from £5.1bn at the end of the third quarter to £4.1bn by year-end. It has also reached agreement with the Prudential Regulation Authority to reduce this to £2.2bn by the end of 2015."This is a significant achievement [...] The huge reduction in the internal loan planned for 2015 represents a major step in removing a concern of ours," he said.Cornes added that the move should not have an impact on the dividend or put undue stress on Aviva's overall capital position.The broker has raised its target price for the stock from 440p to 540p.The stock was 9.5% higher at 510.5p by 10:46.BC