JPMorgan reiterates ‘overweight’ on Just Group, lifts price target

JPMorgan Cazenove reiterated its ‘overweight’ rating on Just Group on Tuesday and lifted the price target to 200p from 190p after it completed a £1.8bn full buy-in with the Trustee of the G4S Pension Scheme, covering the benefits of around 22,500 members.

JPM said the deal, announced last week, was "a milestone" for the company.

More than £1bn schemes account for the majority of Pension Risk Transfer deals in the UK by value, and Just has not competed in this segment before, it said.

"We believe it can now grow market share in this larger segment, capitalising on its reputation as a market leader in small- scheme deals," JPM said.

"We are also re-visiting our assumptions for the UK retail annuity market and raising our estimates for Just Group’s growth in this segment too."

JPM noted that Just Group only writes retail and bulk annuities, and trades at around 50% of tangible book value compared to UK life peers at closer to 1x, in spite of being up more than 60% this year.

"We think it has much further to go, and reiterate our OW rating."