Broker tips: Paragon, AJ Bell, Admiral, Informa
By Iain Gilbert
Date: Tuesday 29 Jul 2025
(Sharecast News) - Shore Capital downgraded Paragon Banking on Tuesday to 'hold' from 'buy' despite what it called a "robust" third-quarter trading update, as it argued the shares were up with events.
The broker said Q3 deposit growth was better than expected on a strong launch from Spring - the new savings product - but mortgage volumes were a little softer than management expected in the period post the April stamp duty change. This resulted in a slight lowering of full-year volume guidance to the bottom end of the prior £1.6-1.8bn range.
"That said, mortgage lending volumes picked up towards the end of the quarter and the pipeline was also up strongly versus the position at the end of March, so this doesn't seem to be an ongoing issue," Shore said. "Furthermore, we had already signalled in our post H1 update note that we expected full year volumes towards the bottom of the range. Consequently. with all other financial guidance unchanged, we are not changing our forecasts."
However, Shore said that as Paragon's shares have continued to perform well since the half-year results and were now closing in on its 975.00p fair value, it has decided to downgrade the rating.
Analysts at Berenberg hiked their target price on online investment platform operator AJ Bell from 420.00p to 490.00p on Tuesday as it praised the group's "strong" Q3 performance.
Berenberg said net flows into AJ Bell continued to "remain strong" in Q325, coming in ahead of consensus expectations. Coupled with a strong period for markets, Berenberg noted that this meant AJ Bell's assets under administration had risen by 6% quarter-on-quarter and 15% year-on-year.
The German bank noted that AJ Bell's management highlighted that Q325 was a record quarter for net flows, with the business benefiting from investment in its brand and propositions.
"We increase our forecast EPS by c15% for FY25 and c11% for outer years. This is driven by the strong market performance in Q3, increases to our flow expectations in the D2C channel, and higher transactional-linked revenue given market volatility; partially offset by higher operational, technology and marketing costs," said Berenberg, which reiterated its 'hold' rating on the stock.
Berenberg added that AJ Bell currently trades on a roughly 22x forward price-to-earnings ratio.
Citi downgraded Admiral on Tuesday to 'neutral' from 'buy' as it pointed to 13% expected total return.
The bank increased its 2025/26 earnings per share estimates by 3% to 4%, mainly due to higher investment income, while also introducing 2027 estimates.
As a resuly, Citi's target price rose to 3,535.00p from 3,370.00.
"The shares have performed very well in 2025 (+30% total return), and with UK motor rates now declining, we see the news flow less positive from here," Citi said.
JPMorgan Cazenove reinstated coverage of Informa on Tuesday with an 'overweight' rating following a period of restriction.
The bank, which set a price target of 1,020.00p on the stock, said the group has transitioned through 10 years of building a leading B2B growth platform, with management's new 2025-2028 programme, One Informa, centred on maximising the value of the portfolio.
JPM said: "With focus now on the existing Live B2B Events business and simplification of the operational infrastructure, we see the company setting up for improved earnings momentum: organic revenue accelerating to JPMe +6% (CAGR25-28E), progressive margin expansion (to 29.5% in FY28E), and reduced financial leverage, driving circa 10% adjusted EPS growth, with upside on accretion through ongoing (and higher) cash returns to shareholders."
The bank argued that in order to unlock value and drive an "overdue" re-rating of the shares there are a number of steps management could take over the next 12 to 24 months. JPM pointed to a potential increased focus on organic versus inorganic execution, the possible disposal of Taylor & Francis, de-risking through deleveraging, and further aligning remuneration to shareholder interests.
"Paired with improving near-term operational performance, we argue for both: 1) ongoing earnings upgrades (JPMe FY26/FY27 adjusted operating profit 1%/3% ahead of consensus) and 2) a further narrowing of the valuation discount to peers," it said.
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