Source: Sharecast
RBC Capital said its post‑results revisions reflected Standard Life's newly announced PRT partnership and operational improvements across pensions and savings, raising group adjusted operating profit forecasts by about 2% on average over FY26-29.
The Canadian bank also kept its above‑consensus expectation for £350m of recurring share buybacks from FY26, noting a payout ratio close to 90% and arguing that consensus estimates were likely to move higher ahead of the 30 November capital markets day.
RBC, which reiterated its 'sector perform' rating on the stock, highlighted a positive tone at Standard Life's CFO roundtable, with discussion focused on retaining workplace customers post‑retirement and on capital allocation. It said management had indicated intrinsic value of more than £10bn on a pro‑forma basis following the Aegon deal and the PRT partnership, with future buybacks to be balanced against investment opportunities and a target for holding‑company cash above £500m.
On the PRT partnership, RBC incorporated Standard Life's plan to deploy £500m of capital over five years, assuming £100m of annual annuity capital strain split 30/70 across the halves. Fee income on guided volumes of £5 to £7bn a year will be recognised through the contractual service margin, with economics similar to the existing PRT business. A gradual ramp‑up is assumed, starting at £5bn in FY27 and rising to £6bn by FY29.
RBC added that much of the enhanced growth outlook was already reflected in Standard Life's valuation, with the shares trading on around 14x FY26 earnings, a premium to UK life peers.
JPMorgan upgraded BP to 'overweight' from 'neutral' on Wednesday and lifted its target price on the stock to 675p from 550p, but noted the energy giant's recent history has been chequered, with operational inconsistencies, strategic inconsistencies and a balance sheet poison pill.
JPM said its 'overweight' stance was centred on balance sheet repair, simplification, renewed long-term upstream growth optionality and a competitive valuation.
The bank said BP's balance sheet was no longer a poison pill, with base case forecasts projecting total financial obligations to fall 50% by YE27, which takes gearing metrics back in line with EU oils peers for the first time this decade. If spot macro conditions were to persist, JPM said the upside case was that this could be delivered in half the time to end-Q127.
"This drives significant improvement in the ratio of financial expenses/dividends, signalling potential for a debt-to-equity value transfer which sees BP return to distribution growth," JPM said. "With the dividend already yielding close to 5% and growing 4% CAGR we assume this is calibrated through buybacks and a 1/3 CFFO payout, giving a 2028 cash yield of 7.4% (versus 2026e 4.8%)."
As far simplification goes, JPM said a tightened remit around value and strategic fit has emergent potential to lead disposal led right-sizing above-and-beyond a prevailing $20bn target.
"Put together, we conclude effective execution on BP’s restructuring agenda has potential to deliver value equivalent to a high single digit percentage underlying EPS CAGR 2025-28," it said. "This would keep the company competitive with what we regard as a conceptual supermajor growth framework through its transition phase while it matures 2030+ volumetric growth potential."