eyeQ: why L&G and Aviva shares are now cheap
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. This sector is starting to build value here.
2nd September 2025 10:28
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
Legal & General
Macro Relevance: 65%
Model Value: 257.45p
Fair Value Gap: -5.95% discount to model value
Aviva
Macro Relevance: 41%
Model Value: 694.93p
Fair Value Gap: -9.2% discount to model value
Data correct as at 2 September 2025. Please click glossary for explanation of terms. Long-term strategic model.
The analyst community have fallen out of love with Legal & General Group (LSE:LGEN). Both JP Morgan and RBC have downgraded the insurer, citing slower margins, high debt costs, a reform programme that’s losing momentum and fears dividend payouts will be degraded.
Clearly there are some serious questions to be asked of L&G management at a fundamental level. The one consolation we can offer them is that this recent sell-off has taken the stock cheap to macro conditions.
eyeQ model value sits at 257.45p; the share price has fallen to around 240p. That discrepancy leaves the stock almost 6% cheap from a macro perspective, which is enough to trigger a new bullish signal.
It is not just L&G to be fair. It’s a similar pattern for fellow insurer Aviva (LSE:AV.), which also screens as cheap to macro. In some respects, Aviva’s macro picture is stronger because eyeQ model value is near the highs. However, our macro relevance score is below our 65% threshold for a regime, so that precludes an official signal.
Extra research is required, especially a bottom-up overlay, but - from a pure macro perspective - the UK insurer sector is starting to build value here.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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