LONDON (ShareCast) - (Sharecast News) - RBC Capital Markets reiterated its 'underperform' rating on Legal & General on Tuesday and cut the price target to 200p from 220p.
The bank, which pointed to "headwinds aplenty", said it is now "incrementally more cautious" on the outlook following first-half results.

"While it reported modest headline beats on core operating EPS and operational surplus generation, these results were supported by a number of lower persistency items, while there were also unexpected negative developments to the IFRS balance sheet," RBC said.

"Further, Pension Risk Transfer profitability headwinds remain, although this is tempered in the short-term by 'management actions', while asset management fee related earnings and retail earnings growth outlooks appear weaker."

RBC said Legal & General's price to book value versus return on equity now compares even less favourably versus peers, hence the reiteration of the 'underperform' rating.

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