This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Observations – For
Observations – Against
Broker RBC (9 July) says dividend (6%) safe despite annuity finance pressure. Wealth Management (LGIM) arm could take market share from Hargreaves Lansdown. FY results (7 March) showed profits up on strong investment inflows and slowdown in life-expectancy among pensioners, reducing pension payments. Recent results from asset management companies positive, with growth in assets under management.
Consensus is bullish with 50% of brokers suggesting Buy and 27% suggesting Hold. This is supported by 72% of broker targets suggesting upside from current levels, to a 12-month average target of 291p, which is just above our short-term target of revisiting May highs. Several July broker updates suggest 300p+.
Risks to LGEN shares include; a fall in bond yields reducing income from safe investments; a rise in annuity rates would increase pension liabilities; disappointing results in August could hurt the shares; a significant equity market sell-off could drag the shares lower.
Next Event: First half results,9 Aug; Ex-div, 16 Aug
Latest Broker 12-Month Consensus: 83% Buy, 17% Hold, 0% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 2.2 | 1.6 | -1.8 | -2.9 | 4.6 | 40.9 | -1.1 | 14.9 | 41.2 |
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Prepared by Michael van Dulken, Head of Research