Broker tips: Aviva, M&G, Hochschild Mining

(Sharecast News) - RBC Capital Markets resumed coverage of Aviva on Monday with an 'outperform' rating and 800p price target. "With the acquisition of Direct Line complete, Aviva is positioned for enhanced earnings per share growth and returns on capital, reflecting a shift towards a higher proportion of 'capital-light' business," the bank said.

"As such, we see the 13 November 'In Focus' event as a positive catalyst, where new, above consensus, group targets will be unveiled, supported by DLG synergy upside."

In addition, RBC said that given Aviva's now larger market cap and more diversified profile, the EU composites become more appropriate peers.

"Aviva's 10x FY26 estimated price-to-earnings and 17% EPS compound annual growth rate stand out as attractive versus this sub-sector, supporting our outperform rating," said the Canadian bank.

Berenberg upgraded M&G from 'hold' to 'buy' on Monday as it turned its attention to UK life insurance stocks, noting that life insurance was its favourite segment within the European insurance sector, ahead of reinsurance, non-life insurance and composites.

Berenberg, which lifted its price target on the stock to 342p from 225p, noted that M&G reported "very strong" solvency of 230% in H1 2025, which means it estimates there is circa £1.4bn of surplus capital above the group's 190% minimum solvency target.

"However, M&G stressed that it views its strong solvency capital as a source of flexibility and potential funding for bolt-on deals, with management highlighting the opportunities in private asset management in Europe," said the German bank.

"In addition, we believe that M&G would benefit from increasing its exposure to workplace pensions in the UK, which is a market that has structural net inflows. We believe that the strong trend that M&G is already seeing in asset management, with £2.6bn of net inflows in H1 2025, plus its new distribution initiatives, will lead to rising AUM, more OCG and higher DPS growth."

Analysts at Canaccord Genuity raised their target price on Hochschild Mining from 350p to 465p on Monday, noting that the group's deleveraging timeframe had been "significantly shortened".

Canaccord Genuity said headlines at Hochschild Mining in the past few quarters have centred around the operational issues and subsequent shutdown and restart of its Mara Rosa project.

However, the Canadian bank stated that, despite this being an operational focus for the company, it should be highlighted that its Inmaculada and San Jose assets still provide 75-80% of underlying earnings generation.

"With a near $4,000/oz gold price going into 2026, we now forecast HOC group EBITDA of US$959m in FY26E. Even without Mara Rosa, we still forecast HOC to be able to generate circa $350m of EBITDA per half," said Canaccord.

"That should be enough to pay for all its capex and dividend requirements in 2026 as well as all of its current net debt in the next 12 months, not including any cash flows from Mara Rosa."

Canaccord, which reiterated its 'buy' rating on the stock, stated that, in its view, the cash flow and deleveraging outlook at Hochschild remains strong.