Berenberg raises target on Plus500

Analysts at Berenberg upped their target price on online trading business Plus500 from 1,033.0p to 1,120.0p on Thursday, stating the group had continued to recent tumultuous conditions across financial markets.

Berenberg said Plus500 was once again trading "substantially ahead" of prior consensus estimates and was "undoubtedly" doing "fantastically well" in the current market environment, acting as a hedge against a volatile market.

However, the German bank thought it was prudent not to extrapolate from this performance, not least of all because it had seen this exact scenario before.

"During the crypto-asset boom and bust in 2017-18, Plus500 upgraded multiple times and had a record-breaking year, but ultimately this trend proved unsustainable," said Berenberg.

"Therefore, despite making large upgrades to our FY 2020 estimates, we continue to value Plus500 as the sum of the expected capital return for FY 2020 and normalised FY 2021 performance."

Berenberg also said it was assuming a continuation of the positive trends seen in new customers, and high levels of both customer income and customer trading performance, even while anticipating a return to normalised operating metrics from the third quarter onwards.

As a result, Berenberg reiterated its 'hold' rating on Plus500's shares.