My Aviva share price prediction for the second half of 2024

Jon Smith outlines some key influencing factors for the Aviva share price in coming months and explains how he thinks it will react.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Over the past year, the Aviva (LSE:AV) share price has comfortably outperformed the FTSE 100. The stock’s risen 25% over this period, which includes almost a 10% gain so far in 2024. Yet as we start the second half of the year, there are several points I think investors need to note that could either spur the rally, or cause a fall. Here’s my prediction.

Potential for reforms

Part of what Aviva does is related to the insurance market and being investment managers. This is interesting because part of what the Labour Party’s looking to do as the new government is to introduce some pension reforms. I don’t know exactly what this will entail, but it could have a positive impact on the company.

For example, there were concerns that Labour would scrap the lifetime allowance, but this has been put to bed. This is a good thing, as any cap could have seen high earners stop contributing to pensions above a certain threshold.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

There’s chatter that the current system of rebates into pension pots depending on income tax levels could be simplified to just one flat rate. I think this would be good for Aviva. Any simplification of regulations should make it more convenient for people and businesses to invest. As a result, this could help to increase revenue and thus aid the share price.

The risk, to my view, is that policies might get blocked through parliament, or any real change could take place beyond this year.

Created with Highcharts 11.4.3Aviva Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The impact of results

In the middle of August we get the half-year results. This will be another key driver for the stock price in coming months. In May, we had the first quarter results, which showed that the business is still performing well.

General insurance premiums were up 16% to £2.7bn versus the same period last year. The wealth management division did well, with net flows of £2.7bn (up 15% from last year). If money from clients is flowing into the business, it can then be used to earn commissions and fees from being invested.

Should we get further confirmation in August that this is being maintained, I think the share price could rally. It will also coincide with the dividend announcement. Given that the current yield is 7.03%, income investors will be watching this closely.

Even though results have the potential to boost the stock, the release could be a negative. The business could have struggled with cash flow issues, investor outflows, or other problems that will come to light.

Positive from here

When I put everything together, I think that Aviva shares can continue to move higher in the next six months. I believe the 10% gain in the first half can be matched in the second half, based on green shoots around simplifying pensions and good half-year results. This would take the share price up to 530p.

Given my view, I’m thinking about adding it to my portfolio.

However, don’t buy any shares just yet

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Secure your FREE copy

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing For Beginners

artificial intelligence investing algorithms
Investing Articles

Just opened a Stocks and Shares ISA? Here are 10 stocks to consider buying, according to AI

With the start of a new tax year, Zaven Boyrazian uses ChatGPT to build a Stocks and Shares ISA starter…

Read more »

Middle-aged black male working at home desk
Investing Articles

I’m planning to keep investing with my Stocks & Shares ISA! Here’s why

Royston Wild explains why he plans to keep building his Stocks and Shares ISA despite current turmoil on the stock…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Is Warren Buffett getting ready for a stock market crash?

Berkshire Hathaway has a record $344bn of cash sitting in the bank right now, signalling that Warren Buffett could be…

Read more »

Investing Articles

How much passive income can an investor get each year from a new £20,000 ISA?

Our writer shows how a £20k investment in an Stocks and Shares ISA could lead to an annual passive income…

Read more »

Investing Articles

Is the US stock market set to crash in April?

Panic about a looming stock market crash is spreading, but what could be the tipping point? And what can investors…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

As the stock market has a meltdown, I’m listening to billionaire Warren Buffett

Our writer has been following Warren Buffett in recent weeks by repositioning his portfolio to take advantage of the market…

Read more »

Investing Articles

How much would an investor need in an ISA for a £100k passive income?

Zaven Boyrazian breaks down how much investors need to put aside each month to potentially earn a six-figure tax-free passive…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

Could BP’s share price rebound over the next 12 months? These analysts think the answer is ‘yes’!

BPs share price has plummeted over the last year. But City brokers think things are about to turn around, as…

Read more »