Citi has reiterated its 'sell' rating on Legal & General, with a slightly tweaked target price of 248p.
The broker is worried about the UK pension risk transfer market, where insurers take on the pension obligations of company schemes.
It says competition in the sector is heating up, and that is squeezing profitability.
Legal & General's new business margins fell to 4.2% in the first half of 2026, from 6.5% in 2025.
Pension buyout volumes also dropped to £2.1 billion from £3.4 billion a year earlier.
Citi flagged higher capital strain on new business and tighter credit spreads as further headwinds.
Bottom of the class
The broker also thinks Legal & General compares poorly with its UK life insurance peers.
On Citi's forecasts and consensus estimates, it has the slowest operating profit and earnings per share growth in the sector over 2026 to 2028.
It also has negative capital generation growth and the weakest dividend growth among peers.
Its dividend cover, measured against both earnings and capital generation, is among the tightest in the sector.
Citi's valuation work suggests fair value sits below the current share price, leaving the risk-reward skewed to the downside.
