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Aviva‘s (LSE:AV.) share value has loved blistering good points during the last 12 months. Traders have obtained a juicy complete return of 32.3%, together with a rising dividend. However what does that imply when it comes to chilly, onerous money?
Since 5 February, 2025, Aviva shares have risen 26.6% in worth, whereas its trailing dividend yield for the interval is 5.7%. It means a £10,000 funding again then would have became £13,320 right this moment.
By comparability, the broader FTSE 100 would have delivered a decrease (if nonetheless strong) return of £12,370. The query is, can the celebration over at Aviva proceed?
What do the consultants suppose?
Metropolis analysts are assured Aviva’s share value can preserve rising. Eighteen of them at present fee the FTSE inventory, and their common 12-month value goal is 697.2p, up 7.9% from right this moment’s ranges.
That’s far beneath the expansion traders have loved during the last 12 months. And it appears to have one thing to do with the insurer’s present valuation. At 646.4p, its ahead price-to-earnings (P/E) ratio is 11.1 instances, which — though not excessive on paper — continues to be above the 10-year common of seven.2.
Based mostly on these forecasts, Aviva shares might nonetheless ship a terrific return in the course of the subsequent 12 months. The corporate’s ahead dividend is 6.4%, which means — if all goes effectively — a £10,000 funding right this moment would grow to be £11,430 by February 2026.
What might go improper?
Aviva faces a sequence of challenges that might impression investor returns over the following 12 months. Its share value might disappoint if, as an example, shopper spending in its key UK market stays beneath stress, hitting earnings. Persistently excessive claims inflation might additionally injury efficiency, and notably at its normal insurance coverage unit.
Regardless of this, I imagine Aviva is a superb inventory to think about. Metropolis analysts are additionally largely constructive on the FTSE agency, with 10 score it as a Sturdy Purchase or Purchase. Seven reckon it’s a Maintain, with only one saying it’s a Sturdy Promote or Promote.
Will Aviva’s share value rise?
Aviva is among the core holdings in my very own portfolio, so I’ve shared in these wonderful returns over the previous 12 months. However I purchased it with a view to carry it for the lengthy haul. I feel its sturdy model energy, numerous product vary, and deep steadiness sheet put it in nice form to capitalise on the booming monetary providers market.
I particularly like the corporate’s concentrate on capital-light companies. This provides it sensible money era that it may well use to distribute to shareholders in dividends, put money into the enterprise, or pursue bolt-on acquisitions for development.
Following its acquisition of rival Direct Line final 12 months, a formidable 70% of working revenue will finally come from capital-light companies. That’s up from 56% in 2025.
So what can we anticipate within the subsequent 12 months? Dangers stay, however the agency’s resilient efficiency in 2025 fills me with optimism. On steadiness, I’m anticipating one other sturdy rise in Aviva’s share value and its dividends.
