Aegon N.V. (AEG) Has Many Growth Opportunities

Aegon N.V. (NYSE:AEG) has been downgraded by Citigroup on January 17 which now rates the stock as Sell compared with Neutral rating suggested in the past. Analysts at BofA/Merrill, shed their negative views on December 12 by lifting it fromUnderperform to Neutral. The stock won favor of ABN Amro analysts who expressed their confidence in it using an upgrade from Hold to Buy on December 10. HSBC Securities analysts came out with bullish views on July 05 when the call was made. They think the stock is now Buy compared to to their prior call for Hold.

AEG stock rose 1.56% in recent trade and currently has a stock-market value of $11.24B. The shares finished at $5.21, after trading as low as $5.19 earlier in the session. It hit an intraday high Thursday at $5.24. Trading activity significantly weakened as the volume at ready counter decreased to 760,522 shares versus 1,299,810 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,474,904 shares. The stock is now 17.87% above against its bear-market low of $4.42 on December 26, 2018. It has retreated -43.57% since it’s 52-week high of $7.48 reached in April. Now the market price is down -23.38% on the year and up 12.04% YTD.

Wall Street’s most bullish Aegon N.V. (NYSE:AEG) analysts are predicting the share price to blow past $7.67 per share during the next 12 months. The current median share price forecast by them is $5.79, suggesting that the stock could increase 11.13% in that time frame. The average price target of $5.99 calls for a nearly 14.97% increase in the stock price.

Aegon N.V. (AEG)’s 50 day simple moving average (SMA 50) price is $5.12 and its 200-day simple moving average (SMA 200) price is $5.76. The company’s stock currently has a total float of 2.08B shares. Its weekly volatility is hovering around 0.97% and felt 1.28% volatility in price over a month. On the upside, the share price will test short term resistance at around $5.24. On a downside, the stock is likely to find some support, which begins at $5.19. The failure to get near-term support could push it to $5.16.

When looking at valuations, Aegon N.V. (AEG) has a pricey P/E of 15.15x as compared to industry average of 13.42x. Moreover, it trades for 6.28 times the next 12 months of expected earnings. Also, it is trading at rather inexpensive levels at just over 0.4x price/book and 0.48x price/sales. Compared to others, Aegon N.V. is in a different league with regards to profitability, having net margins of 10.6%. To put some perspective around this, the industry’s average net margin is 8.75%. AEG’s ROE is 9.3%, which is also considerably better than the industry’s ROE of 6.89%.

Shares of AEG have dropped -13.8% since the company’s most recent earnings report. For this quarter, Wall Street analysts forecast revenue in a range of $26 billion to $27.67 billion, which should be compared with $28.57 billion generated last year. EPS is seen in a range of -$11.6 to -$11.6, against the 0 reported a year ago.