Restructuring following the sales of its overseas businesses is now in the price, says the Swiss broker, and the focus now switches to operational improvements.
To achieve that will require a shift in business mix, in UBS’s view, which will take time to deliver with untested complexities and investment/M&A needed.
Aviva, however, is better placed than rival L&G PLC(LON:LGEN), which UBS rates as a sell.
L&G’s share price has bounced on rising rates, benign credit risk and positive regulatory noises but earnings ratings appear full and cash/capital analysis points to pressure on dividend forecasts.
Targets are 420p for Aviva and 240p for L&G compared to market prices today of 407.6p and 278.8p respectively.