Broker tips: Plus500, IG Group, Breedon, Jet2
By Iain Gilbert
Date: Friday 21 Nov 2025
(Sharecast News) - Bank of America initiated coverage on Plus500 on Friday with a 'buy' rating and 3,630p price target, saying it's a high-quality business with 42% return on invested capital, free cash flow conversion above 100% and $1bn of capital returns by FY28E.
"We estimate the company's strategic shift to higher-quality customers has doubled the lifetime value of an average customer, and the variable cost base enables this increasing revenue quality to be distributed to shareholders," the bank said.
BofA said its discounted cash flow valuation implies a potential total shareholder return of 23% and stated it doesn't think the stock's current valuation of 10.2x twelve month forward price-to-earnings ratio reflects the scale of capital return.
Also on Friday, BofA started coverage of IG Group, with a 'neutral' rating and 1,220p price target, saying it sees it as an "increasingly stable business".
BofA forecasts FY25-28E return on capital invested at circa 15%, which it said looks sustainable. It also forecasts 5% revenue compound annual growth rate and profit before tax margins at circa 45%.
"We forecast 2% p/a dividend to grow alongside buybacks of £175-200m p/a FY25-28E," it said. "However, volatility remains regarding the revenue profile, the overhang from potential increase to the betting levy and uncertainty around the delivery of the diversification strategy.
With the shares trading at a 9x twelve month earnings per share ratio, the US bank sees the risk/reward scenario as "balanced" and reiterated its 'neutral' rating on the stock.
Analysts at Berenberg lowered their target price on construction firm Breedon from 540p to 465p on Friday following the group's trading update for the 10 months ended 31 October.
Breedon ultimately guided for full-year underlying earnings to come in roughly 4% lower than the prevailing consensus, as it said end-markets remained challenging through the year.
"The share price reaction on the day - the share price fell by c2% - suggests that these challenges were largely understood," said Berenberg, which lowered its forecasts and price target to reflect the updated guidance.
"Breedon is not suddenly a bad company, but not much has gone well for it this year. The weather, the macro and the politics have all conspired against it at various times. Clearly calling the macro inflection point has proven tricky of late, but the volume of data points would make it hard to argue we are not close to, or around, a trough."
To that end, the German bank highlighted the longer-term prospects - saying the UK government's commitment to infrastructure and housebuilding should drive demand for building materials, while it also said the publication in Ireland earlier this year of the National Development Plan could drive a significant increase in infrastructure investment, and stated that there was still "considerable potential" to grow the business in US.
Berenberg, which reiterated its 'buy' rating on the stock, said Breedon's shares trade on 10x FY 2026 price-to-earnings ratio and 6x EBITD.
Panmure Liberum has reiterated a 'buy' call on Jet2 despite predictions that the budget airline will take three years to return to earnings growth.
Jet2 has a strong track record of growth, but short-term earnings improvements have been traded for the "expensive" move to launch a new base at Gatwick from next summer, the broker said.
Panmure Liberum said Jet2's operating profit was predicted to be flat over the current fiscal year ending March 2026, and decline in FY27, before growing in FY28 - with potential future share buybacks providing scope for further EPS growth.
"This lack of short-term earnings growth reflects the tough comparative provided by recent success, a more challenging trading environment this year, and the costs associated with the Gatwick base launch, with management not expecting this operation to be profitable until FY29E," said Panmure Liberum. "The long-term fundamentals remain attractive, but the Gatwick move brings risks as well as potential rewards, and costs in terms of mobilisation spend, startup losses, and the postponement of earnings growth."
Panmure Liberum, which has a 1,700p target price on the stock, said Jet2's valuation remains highly attractive, with the stock trading at just 6.4x current-year earnings, but stated "patience" was required.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN