RBC Capital Markets lowers 3i Group to 'sector perform'

Analysts at RBC Capital Markets downgraded 3i Group from 'outperform' to 'sector perform' on Monday, citing valuation grounds.

RBC said it views 3i Group as a "best-in-class business", with a "conservative but successful" model and a strong management team.

"This is evidenced by III's outperformance in the last few years, despite challenging macro backdrop," said RBC, which has a 3,425.0p target price on the stock.

The Canadian bank stated a "good chunk" of this outperformance had been driven by Action, which it views as "a very high-quality retailer".

However, RBC noted that 3i's share price has risen more than 140% in the last three years, and it now views the shares as more fairly valued.

Reporting by Iain Gilbert at Sharecast.com