Liberum nudges up target price on IG Group

Analysts at Liberum raised their target price on financial derivatives trader IG Group from 725p to 740p on Monday, stating the group was likely to continue benefiting from the recent heightened volatility seen across markets.

Liberum updated its "already top-end of consensus" forecasts for earnings per share in the 2020 financial year by 14% after sustained market volatility resulted in IG Group releasing a surprise update, just three weeks since its third-quarter trading statement.

However, given the uncertainties around how long the current trading conditions would prevail, as well as how clients will react to potential losses, the analysts said they only expected IG to see a "limited medium-term benefit" at this stage.

As a result, the upgrades to their estimates for 2021 were only moderate, acknowledging the likely benefit of the increased client base on the group's long-term earnings potential.

"Despite this, we do not see the shares as offering material upside, a view which is supported by the fact the shares trade at twice their long-term premium to the FTSE All-Share," said Liberum, which also reiterated its 'hold' rating on IG.