Aviva share price: what to expect from 2018 results

Markets expect to see mid-single digit earnings growth year on year from Aviva for full-year 2018, which lost its chief executive officer in October last year.

When is Aviva’s earnings release date?

Aviva Plc, the international insurance company which also offers a variety of financial services - including unit trusts, stockbroking and fund management - is set to release full-year (FY) results for 2018 on 7 March 2019.

Aviva results: what does the City expect?

Bloomberg consensus estimates arrive at the following expectations for the upcoming FY 2018 results from Aviva:

  • Revenue £31.208 billion
  • Net income (on an adjusted basis) £2.123 billion
  • Operating profit £3.157 billion
  • Earnings per share (on an adjusted basis) £0.58
  • Earnings per share (GAAP) £0.35

After weaker-than-expected interim results, markets will be eager to see whether the group has been able to achieve mid-single digit (5%) growth in operating earnings per share for the full year. Factors that have weighed on interim earnings, such as a weak performance from the Canadian motor insurance business, business divestments and adverse weather conditions were expected to have abated in the second half (H2) of the year to allow for the marginal earnings growth.

A miss against estimates would assume disruption from the loss of the group’s CEO Mark Wilson, who stepped down from his position in October last year. The group has now (as of 4 March 2019) named Maurice Tulloch as Wilson’s successor, who will need to reignite shareholder growth to appease investor sentiment. Tulloch has been with Aviva since 1992, heading up the group's international insurance businesses.

A miss against estimates would assume disruption from the absence of leadership in the form of a chief executive officer (CEO). Former group CEO, Mark Wilson, stepped down from his position in October last year and markets are growing impatient with the group’s slow progression in terms of finding a replacement for the vacant position.

How to trade Aviva 2018 results

Both retail traders and longer-term analyst views (see broker ratings and client sentiment below) suggest keeping to the buy side of the Aviva share price.

Broker ratings

A Thomson Reuters poll of 18 brokers maintains a long-term average rating of buy for Aviva (as of 27 February 2019), with 7 of these analysts recommending a strong buy, 7 recommending a buy, 3 hold and 1 strong sell recommendation on the stock.

Client sentiment

From a retail trader perspective (as of 2 February 2019), 96% of IG clients with open positions on Aviva expect the price to rise over the near term, while 4% of IG clients with open positions expect the Aviva price to fall.

Aviva share price: technical analysis

Applying trend studies to the share price of Aviva, shows the short- to medium-term directional trend to be up, while the longer-term directional trend is considered down.

The short- to medium-term uptrend is gauged by noting that the share price of Aviva trades firmly above the 20-day simple moving average (SMA), which also trades above the 50-day SMA.

The price, 20-day SMA and 50-day SMA all trading below the 200-day SMA, assumes the long-term trend bias for Aviva to be down.

The stochastic oscillator (indicator below price chart) suggests that the short-term move higher has put the Aviva share price into overbought territory (bearish). The stochastic also shows a bearish divergence with the price (see red lines showing higher highs on the price while lower lows emerge on the indicator).

Technical analysis show short bias to Aviva share price at 405 resistance

While the short- to medium-term trends are considered up, the longer-term downtrend combined with the overbought and divergent momentum signals favour keeping a downside bias to trades on Aviva.

The divergence and overbought signals suggest that 405 may be the next support level targeted, a break of which (with a close) would consider the next level of support targeted at 380.

Should the price instead move to close above the 440 level, the short-term bearish trade suggestions would be deemed to have failed.

What to expect: in summary

  • Investors will be looking for progress on the CEO succession
  • Bloomberg consensus estimates suggest full year revenue of £31.208 billion
  • Earnings per share growth of around 5% year on year is expected
  • 96% of IG’s retail traders with open positions on Aviva expect the share price to rise
  • The average long-term broker rating (as per Thomson Reuters) for Aviva is a buy
  • Technical analysis of the Aviva share price suggests that the short- to medium-term trends are up, while the long-term trend is down and the share is overbought
  • The weight of the technical analysis assumptions suggests a downside (short) bias to trades on the share

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