Shares in IG Group Holdings Plc (LSE:IGG) rose 2% following a bullish note from UBS research report highlighting the trading services firm's growth prospects under new CEO Breon Corcoran.
UBS initiated coverage with a 'buy' rating and a 1,150p price target that offered 30% 'upside potential' from current levels.
The note highlighted that the strategy from ex Paddy Power boss Corcoran, who took office in January, focuses on product innovation, cultural transformation and operational efficiency to drive long-term growth and earnings.
UBS emphasised IG's strong potential for cyclical growth, particularly in over-the-counter (OTC) and exchange-traded derivatives (ETD) trading.
Its recent performance, including a solid second-half revenue run rate of £515 million and £275 million in Q4, positions it well against current consensus estimates.
Analysts also noted IG's heavily discounted valuation, with a forecasted 16% EPS growth for FY25, making it an attractive investment opportunity.
UBS expects the company's initiatives to enhance product velocity and efficiency to yield significant earnings growth and drive a re-rating of its shares.
IG Group's strategic expansion into the US market and diversification into ETD products, combined with a strong cash flow and capital return strategy, further support its positive outlook, the Swiss bank said.
In afternoon trading the stock was changing hands for 900.5p, up 20p.