Jefferies downgrades Aviva to Hold, citing fair valuation after Direct Line deal, with 9% yield attracting income investors.

Jefferies has downgraded Aviva PLC from Buy to Hold, stating that the insurer's valuation now fairly reflects its reshaped profile following the acquisition of Direct Line. The broker raised the price target to 637p but noted limited upside potential of about 2% as the stock trades near 623.6p. Despite the downgrade, Aviva offers an attractive all-in yield of around 9% annually, including buybacks, appealing to income-focused investors. Jefferies highlighted that Aviva's business mix now resembles a European composite insurer, with UK & Ireland General Insurance as its largest earnings contributor, but cautioned about execution risks in this segment.