Aegon Stock Surges 37%, Exceeds Targets and Keeps Buy Rating Alive

Aegon stock has rallied by 37% following its H1 results, exceeding both my base case and optimistic price targets. The stock price outperformed the S&P 500, which gained 5.3%. Despite this, the P/B valuation keeps the buy rating alive.

Aegon's stock has experienced a significant rally, increasing by 37% following its first-half (H1) 2025 results. This performance not only exceeded both the base case and optimistic price targets but also outperformed the broader market, with the S&P 500 gaining 5.3%. Despite the robust gains, the price-to-book (P/B) valuation remains favorable, keeping the buy rating alive.

The company reported a 19% increase in its operating result to €845 million, driven by profitable business growth and improved claims experience in the US, UK, and international segments [1]. However, operating capital generation before holding and funding expenses declined by 2% year-on-year due to higher new business strain, particularly in US strategic assets [1]. The company also raised its interim dividend to $0.19 per share and increased its share buyback program by €200 million, targeting €400 million total in 2025 to return excess capital [1].

Aegon's CEO, Lars Frieser, highlighted the company's strong commercial momentum, with higher new life sales and net deposits across key markets. The company also extended the hedging of the variable annuity portfolio to cover 25% of base fee exposure, reducing equity market risk [1]. Additionally, Aegon announced a review to potentially relocate its legal domicile and head office to the US, aiming to align tax, accounting, and regulatory frameworks with its largest market [1].

The stock's performance is a reflection of Aegon's solid financial results and strategic initiatives. Despite the P/B valuation remaining favorable, investors should closely monitor the company's progress on its transformation strategy and the outcome of the review regarding the potential relocation of its head office to the US.

References:
[1] https://www.marketbeat.com/earnings/reports/2025-8-21-aegon-stock/