IG Group shares target trimmed, maintains buy on general market indicators evaluation By Investing.com

On Thursday, Deutsche Bank adjusted its stock price target for IG Group Holdings (IGG:LN) (OTC: IGGHY), a UK-based financial services provider, to GBP10.25, down from the previous GBP10.50. Despite this reduction, the firm continues to endorse the stock with a Buy rating.

The revision follows the evaluation of general market indicators for May and an anticipation of the company’s fiscal year 2024 results, which are expected to be released on 25 July 2024. Deutsche Bank has increased its revenue and earnings per share (EPS) forecasts for FY24 by 0.4% and 1.6%, respectively, based on the performance indicators of the fourth quarter.

Still, looking beyond FY24, the bank has expressed a more conservative stance. It has lowered its EPS projections for FY25 and FY26 by 10.5% and 14.1%, respectively. This conservative outlook is due to expectations of continued low market volatility and a cautious view on the potential for increased trading activity in the subsequent years.

The new stock target price of 1,025p, down from 1,050p, reflects these adjusted estimates for FY25. Despite the lowered expectations for the outer years, Deutsche Bank has reiterated its Buy recommendation for IG Group Holdings, signaling continued confidence in the company’s performance in the near term.

In other recent news, IG Group Holdings has seen its share target upgraded by RBC Capital due to an improved outlook. The financial firm has raised the price target for IG Group from £9.50 to £10.00, while maintaining an Outperform rating on the company’s stock. This adjustment comes ahead of IG Group’s financial year 2024 results, which are eagerly anticipated as the first report under the leadership of new CEO Breon Corcoran.

RBC Capital expects IG Group to deliver solid fourth quarter results, driven by slightly improved trading conditions. The firm also predicts a potential strategic re-evaluation of IG Group’s US derivatives brokerage business, tastytrade, under the new management. RBC Capital’s analysis suggests tastytrade could be a source of value realization, possibly through a sale or a shift in market perception.

These recent developments have influenced RBC Capital’s decision to increase the price target for IG Group. The firm’s revised stock price target reflects confidence in IG Group’s ability to capitalize on current market conditions and strategic decisions made by the new CEO.

InvestingPro Insights

IG Group Holdings (IGGHY) has been demonstrating financial resilience and investor confidence, as highlighted by the recent InvestingPro data. With a solid market capitalization of $3.84 billion and a compelling P/E ratio of 10.9, the company stands as an attractive investment option.

The dividend yield of 6.24% is particularly noteworthy, especially considering the company’s track record of maintaining dividend payments for 19 consecutive years. This commitment to shareholder returns is complemented by a strong return on assets of 10.58% over the last twelve months, underscoring efficient management and profitability.

InvestingPro Tips further reveal that the management’s strategy of aggressive share buybacks, coupled with the stock’s low price volatility, paints a picture of a stable investment. Moreover, the company’s liquid assets surpassing short-term obligations indicate a robust financial position.

For those interested in exploring more about IG Group Holdings, InvestingPro offers additional tips and insights. Moreover, by using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to an even wider array of expert analyses and tips. With 7 additional InvestingPro Tips available, investors can delve deeper into the company’s prospects and make informed decisions.

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