Broker tips: Legal & General, International Consolidated Airlines Group

22nd Jun 2026 13:46

(Sharecast News) - Analysts at Berenberg lifted their target price on Legal & General from 308p to 353p on Monday, saying growing confidence in the sustainability of the insurer's dividend growthwasis helping drive a stronger share price performance this year.

Berenberg noted that L&G has delivered a 14% total shareholder return year‑to‑date, well ahead of the STOXX Europe 600 Insurance index, and said several indicators point to the group moving back towards fully covering dividend growth from operating cash.

These include its ongoing £1.9bn buyback programme, which was set to cut the share count by 11% by 2026, and a modest 2% dividend compound annual growth rate that reduces the total cost of distributions. L&G has also guided that net surplus generation should cover the dividend by 2027 and Berenberg said this increased transparency should support a gradual rerating.

The German bank left its 2026 and 2027 earnings forecasts unchanged but raised its 2028 estimate by 6%, reflecting confidence in L&G's plan to lift workplace‑pensions operating profit from £60m in 2025 to £180m by 2028. However, Berenberg also removed future buyback assumptions, expecting excess capital to be directed toward growth instead.

Berenberg added that L&G's disciplined approach in pension risk transfer, even as market share moderates, remains positive for value creation and stated higher long‑term interest rates also strengthen the company's solvency position, with a 100bp rise adding around 11%.

"We value L&G on a sum-of-the-parts basis, and the increase in our price target reflects the roll-forward of our valuation to our 2028E earnings forecast, as well as the fact that we raise our valuation P/E ratios by 0.5ppt, reflecting the increased growth potential that we see in the UK pensions and savings market," concluded Berenberg.

Deutsche Bank has hiked target prices across the listed European airlines sector after the recent slump in oil following the US-Iran peace deal agreed last week, as concerns about supply disruptions eased significantly.

The German bank said on Monday it has raised its target for shares of 'buy'-rated International Airlines Group from 460p to 540p as it also upped stock target estimates for continental peers Air France-KLM and Deutsche Lufthansa.

Spot Brent crude prices dropped from nearly $100 a barrel at the start of June to below the $80 mark last week, falling a further 1.7% to $79.21 on Monday morning, following last week's agreement to end the conflict and reopen the Strait of Hormuz. The forward curve for fuel prices has also "come down significantly", according to analyst Jaime Rowbotham,

"As a result, we are marking to market our assumptions for unhedged requirements at $910/mt for 3Q26, $875/mt for 4Q26 and $830/mt in 2027," he said. "At IAG [...], where our previous assumptions were struck at the height of the ME conflict and of concerns in terms of the outlook for jet fuel, this has resulted in LSD% reductions in the estimated fuel bills for 2026. Our estimate for IAG is now €8.56bn vs their guidance for ~€9bn on 8th May."