Jefferies downgraded Legal & General on Tuesday to ‘underperform’ from ‘hold’ as it said the company’s income story is deteriorating.
Source: Sharecast
"Solvency surplus generation is fully consumed by dividends, capital optionality is effectively zero, and returns rely increasingly on contingent management actions," the broker said.
"With solvency drifting lower and no buybacks in sight, the equity risk premium looks too low, leaving the stock exposed to a valuation reset and investor rotation to other income alternatives."
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