LONDON (SHARECAST) - Galvan Research and Trading has recommended to buy shares of insurance giant Prudential, saying that the stock's recent underperformance is 'unwarranted'.
"Although recent weeks have seen the market plump for sector peer Aviva rather than Prudential, Galvan Research regards the Pru as a 'buy' on the basis of the recent relative share price underperformance and the fact that the fundamental downside remains cushioned by very strong Asian growth," said Galvan's head of research, Andrew Gibson.
In the first half, the company reported that total revenues rose from £21,603m to £23,881m year-on-year, while pre-tax profit increased from £1,208m to £1,299.
Galvan highlights that Asia delivered a 21% rise in operating profit and an 18% rise in new business profit. Meanwhile, Asia's cash contribution to the group was up 20% at £126m.
"The recent consolidation for Prudential shares has taken place above the 50-day moving average at 768p. While this charting feature remains in place as support, the upside here should be a minimum retest of the summer 820p plus resistance zone," Gibson said.
By 11:17 on Monday, shares were up 0.13% at 788p.