Here’s where I see the Aviva share price ending 2024
The Aviva (LSE: AV.) share worth has been slowly trending upwards within the final 5 years. Throughout that point, it’s climbed 18.2%.
And it’s continued this high quality type into 2024. Yr up to now, the inventory’s risen 11.8%, outperforming the FTSE 100, which is up 8.2%.
However as buyers, we shouldn’t focus too closely on what’s been and gone. Granted, it could actually typically assist us make higher selections. Nonetheless, I’m extra anxious about how a inventory will carry out within the instances forward. That’s extra essential.
With that in thoughts, the place may Aviva finish this yr?
My prediction
As highlighted above, the Aviva share worth has been steadily gaining momentum in latest months and I feel it’ll proceed to move upwards in 2024.
If its share worth had been to interrupt the £5 barrier, which it flirted with on the tail finish of March, that will signify a 3.1% rise from its present worth (£4.85).
However to be sincere, I feel it may climb additional. The UK inventory market’s been performing strongly this yr, I reckon we may see Aviva break via £5. A 5% rise from its present worth would go away its share worth at £5.09. I feel someplace nearer to that may very well be extra viable. However in fact, lots may occur which means it doesn’t get there!
Valuation
So I’m bullish on Aviva shares. However what may push their worth increased? Nicely, its valuation is one issue.
The inventory at the moment trades on a trailing price-to-earnings ratio of 12.9. That’s a small notch above the Footsie common of 11. Nonetheless, it does look cheaper than its rivals Prudential (15.7) and Admiral Group (24.8). Bearing that in thoughts, it seems to be like there’s nonetheless worth in Aviva.
Streamlining mission
As Aviva continues on its streamlining mission, this might additionally assist drive the inventory increased. The enterprise has been trying to slim down its operations for years. Nonetheless, beneath CEO Amanda Blanc, it’s sped up this course of.
Beneath her tenure, the enterprise has disposed of over a dozen underperforming companies. Trying forward, there’s speak of it offloading extra within the months to come back.
That’s a part of its wider plan to trim some fats and reduce prices. Up to now, it appears to be paying off. Final yr, the corporate delivered its £750m price discount goal a yr forward of schedule.
The dangers
Whereas that’s all effectively and good, there are dangers with streamlining. Basically, it leaves Aviva reliant on only a few markets. Ought to they underperform, this might have destructive implications for its share worth.
What’s extra, I’m all the time cautious of sudden occasions reminiscent of pure disasters when investing in insurance coverage corporations. These occasions can massively affect their funds, so it’s all the time one thing I keep in mind.
I’d nonetheless purchase
However even with these dangers thought of, at its present worth I’d nonetheless purchase Aviva shares immediately if I had the money. Not solely do I feel the inventory seems to be good worth and I just like the strikes the agency’s making, I’m additionally a fan of its 6.9% dividend yield.
That’s method above the Footsie common. And final yr, its dividend elevated 8%. Meaning I may choose up some passive revenue whereas I look ahead to its share worth to maintain climbing.