Shares in Resolution gain 3.5 percent, the top FTSE 100 risers, with traders citing a hike to the life insurer's target price by JPMorgan.
JP Morgan raises its target price on the stock, which opened at 277 penceand currently trades at 284 pence, to 302 pence from 273 pence.
"We remain confident around the capital position at Resolution as itseconomic capital (ICA) and IGD capital (Solvency I) capital remain relativelystrong and offer strong support to its current dividend yield of 7.6 percentversus the UK life insurance sector yielding 4.0 percent," analysts at JP Morgansay in a note.
Resolution trades in the middle of its peer group on a forwardprice-to-earnings basis, according to Thomson Reuters StarMine data, with itsratio of 11.1 representing a discount to Admiral and Standard Life but a premium to Legal & General and Aviva.
"In terms of valuation, we see modest upside on the stock (c. 8 percent) butwe believe that with management delivering on the cost savings the valuationcould be a bit higher."
Reuters messaging rm://alistair.smout.thomsonreuters.com@reuters.net