Exane downgrades Prudential to 'underperform'

Investors should reward this through a lower yield, Exane said. It noted that the capital generation from the in-force book has been growing at around 8% a year and said it thinks there’s approximately $4bn of capacity for M&A.

"But this is not, in our view, sufficient to justify the low yield implied by the current valuation," Exane said.

"After a strong run in the past few months, and utilising a new valuation approach focused on distribution capacity…we downgrade to underperform."

At 1300 GMT, the shares were down 1.9% at 1,216.50p.