JPMorgan lifts Just Group price target

JPMorgan Cazenove lifted its price target on Just Group on Wednesday to 125p from 115p to reflect higher new business sales forecasts, and a valuation roll-forward.

It argued that the market is overlooking the company, which in its view is "the most focused way to play the strong growth potential of the UK pension risk transfer (PRT) market".

"In spite of its low market cap, Just is clearly punching above its weight and with market share of circa 10% in 2022 is now one of the major insurers in this market, with balance sheet strength and Solvency II capital that is comparable with peers," JPM said.

"While we understand investor concerns about its mono-line business model and asset risks, we think these are more than priced in at circa 3x 2024E IFRS4 P/E and circa 0.4x 2023E unrestricted tier 1 capital (SII equity)."

The bank forecasts more than 20% compound annual growth rate new business sales growth to 2025E and similarly strong growth in underlying profit.

JPM has an ‘overweight’ rating on Just Group.