While the merger between Standard Life and Aberdeen aims to create a firm that can weather the storm, the Standard Life share price is struggling. The firm has struggled to recover and is likely to continue to lose value. The merger failed to create the catalyst required to revive the firm, so investors may have to remain patient. Despite trading at a cheap valuation, there are a number of concerns that could lead to the stock’s further decline.
The company has said it will report unimpressive results in its first full quarter. In fact, it is expected to post a net loss of $5.8 billion, making its share price uncompetitive. In response, Standard Life has been focusing on removing its default tagline – ‘we’re struggling’ – and gaining media buy-in on its turnaround. However, without the historical taglines, the company would have been an instant success.
The company’s members voted in favour of converting to PLC status, which paved the way for a float on the London Stock Exchange. Standard Life is now a part of the FTSE 100, one of the world’s most influential share price barometers. As a result, the Standard Life share price has enjoyed impressive growth, outperforming the industry’s average and benchmark. The company’s rebranding will only continue to boost its share price.
The company recently cut its dividend by one-third. While the dividend may be back on track, Standard Life’s share price has been hit by a flight of investors. The rebrand may not be enough to bring back its growth. Standard Life has been operating as a company for more than 200 years, so its new name may cause confusion for investors. It is unclear how many more years the company can keep its brand name intact.
The stock price has been volatile in recent months due to a number of reasons. One of them is the recent uncertainty in the economy. Investors have reacted to the uncertainty in the markets by buying shares of a number of leading insurers. Some of these insurers had already posted a positive half-year profit, while others were less optimistic. Standard Life was no exception. The company has also cut its operating expenses by around 11%.
Several factors have affected the Standard Life share price, including the company’s rebranding to Abrdn plc. In addition to the rebranding, Standard Life is expanding its partnerships, but it has yet to show any tangible results. Apart from the acquisition of Standard Life Canada, the company is planning to rename itself to Abrdn plc. This change is expected to happen over the next few months and will be listed before the half-year results in August. The change should improve customer awareness of the brand.
While the Standard Life share price has fallen over the past few years, it is still considered an undervalued stock and is a potential buy. It is worth considering that Aberdeen’s share price was rising before the merger and may be set to climb further before the merger is complete. Although it is now trading at a lower level than before, the firm is still a highly regarded and respected insurer. The company has a huge client base and has proven its resilience during the coronavirus pandemic.
