Goldman reiterates buy on Aviva but trims target price

Aviva´s share price underpeformance versus rivals since it bought Friends Life Group is "unwarranted", Goldman Sachs said.

Since November 2014, the stock was down by 24% despite its restructuring potential. That included a material increase in the amount of cash on hand and available for distribution, resulting in a five-year compound annual growth rate of +14%, analysts Ravi Tanna and William Elderkhin said in a research note sent to clients.

European insurers on the other hand offered relatively modest growth prospects.

Currency movements (and other market movements) led the analysts to lower their earnings per share forecasts for 2015-2019 by between 5-6% but the company still held the potential to deliver on several catalysts.

At its third quarter business update, the company said it was on track to deliver 225m pounds of run-rate cost synergies by the end of 2017 and management expected to deliver "material" capital synergies in 2016/2017.

Key for the former, Aviva was expecting the UK regulator to approve its internal model in December.

Goldman took down its target price for the shares peg, to 610p from 585p, but reiterated its 'buy' recommendation.