IG Group shares fell a further 2% on Monday to about 971.5p. They have lost almost a quarter of their value since Friday's warning.
RBC Capital Markets and Panmure Liberum both still rate the stock a 'buy', though at lower targets.
Retention the problem
IG cut its full-year guidance on Friday after a weak third quarter. Panmure Liberum says retention on over-the-counter (OTC) trading fell to about 70%, against the roughly 80% averaged since the second half of 2025.
Panmure analyst Barun Singh calls it "a retention miss, not a customer miss". Third-quarter OTC net trading revenue fell about 18% to around £155m, even though OTC customer income rose about 8%. Customers traded more, and IG kept less of it. Organic first trades were up more than 25%.
Singh cuts his target to 1,500p from 2,000p. He has also dropped his discounted cash flow model in favour of a multiple of 7.8 times 2027 EBITDA, until retention is proved to be stable. His 2026 revenue forecast falls 8% to £1.17bn and EBITDA drops 18% to £478.8m. He says the target implies upside of 51.5%.
RBC's Ben Bathurst trims his target to 1,650p from 1,850p, which is about 67% above Friday's close. His earnings per share forecast falls 15% for 2026 and by 11% and 10% for the next two years. He puts the shares on 7.7 times 2027 earnings, a 23% discount to their seven-year average of 10 times. The stock is also down about 50% from its June peak.
Underdog in the spotlight
Both brokers point to two dates. IG holds a seminar on its Underdog acquisition on Thursday, and a strategy update follows on 22 October.
Bathurst says the market has priced in all the downside from the Underdog deal. He also flags the risk of IG's removal from the FTSE 100, which would force index funds to sell. A good reception on either date could ease that overhang, he argues.
Panmure notes that Underdog's third-quarter net revenue more than doubled to about $105m. The deal has not yet completed. With the core business in question, Singh says the seminar carries more of the investment case than it did in August.
