Broker Peel Hunt initiated coverage of Just Group on Monday with a ‘buy’ rating and 120p price target.
“Just is at the tail end of repairing a strained capital structure,” Peel said. “The process is now helping rebuild new business sales, which underpin future cash flow.”
Meanwhile, it noted the share price has fallen well below the intrinsic value of the company’s in-force annuity book.
“Whilst the cash is still trapped, hence for now no dividends, the company trades at 0.4x SII Tier I NAV, well below the 0.7-0.8x of listed closed-book Life insurers. We believe this is an opportune moment to buy into a depressed valuation.”
At 0955 GMT, the shares were up 5.6% at 84.10p.
