Source: Sharecast
In a note published on Friday, the bank reiterated its ‘overweight’ ratings on both insurers, and increased Just Group’s price target to 135p from 125p.
It said: "Our deep dive of UK life shareholder asset portfolios suggest that credit risks are more benign than the market perceives.
"We also note JP Morgan credit strategists’ view that the outlook for investment grade credit spreads in the UK looks quite benign in 2024."
It continued: "L&G would be a clear beneficiary of moderating concern on credit risk.
"With a new chief executive in place - Antonio Simoes - we expect L&G to assess it capital management policy and growth strategy, with potential for positive surprise on capital return and earnings growth.
"Just Group’s management actions in recent years have led to a Solvency II ratio, debt leverage and quality of capital that now compares favourably with peers.
"We see very strong new business growth prospects, which should support double digit dividends per share growth, coupled with an attractive valuation."
As at 1045 GMT, shares in L&G were up 1% at 247p, while Just Group was largely flat at 83.37p.