Peel Hunt has reiterated its positive long-term outlook on Phoenix Group Holdings PLC (LSE:PHNX), highlighting the company’s shift toward becoming a broader pension provider while its back book continues to generate significant cash flows.
The pension giant reported better-than-expected cash generation for the first half of 2024, with a total of £950 million in remittances to the group holding company.
This was significantly ahead of Peel Hunt's estimate of £805.00 million and the consensus forecast of £739.00 million.
Excluding one-off management actions, operating cash generation reached £647.00 million, surpassing Peel Hunt’s projections by 7%.
The broker sees value in Phoenix shares, which offer a yield of around 10%, with and 18% upside potential to Peel Hunt’s target price of 650p.
Phoenix Group is a UK-based savings and retirement business focused on providing life insurance, pension funds, and other financial services.
Shares fell by 4.6% to 549.74p on Monday.