M&G’s plan for £450m of debt deleveraging to reduce its Solvency II leverage ratio to 30% by end-2025 is a positive, prudent step from management, analysts at Deutsche Bank suggest.
“Whilst the bears may use this to question the quantum of capital generation over the next 18 months, we believe M&G's cap-gen potential is robust over the next three years (evidenced by a strong target range),” the bank said.
“This should support dividend growth once the leverage target is achieved.”
Fund manager M&G trades on a 10% 2024e yield (vs UK life at 9%) notes Deutsche Bank.
'Buy' with a target of 240p is its investment view. The shares were down 0.9% at 201.2p.