Shawbrook Group PLC's (LSE:SHAW) return to the stock market is attracting early backing from analysts, with Deutsche Bank and UBS both initiating coverage on the specialist lender after its October IPO.
Each starts with a 'buy' rating, though with differing views on how far the newly listed shares can run.
Deutsche takes the more bullish stance, setting a 610p price target versus 440p currently (up 2% on the day).
It argues that Shawbrook is growing faster than any other UK bank and doing so with what it calls best-in-class efficiency.
Years of investment in technology and a deliberately diversified mix of niche lending, from small business finance to specialist mortgages, have created a platform capable of delivering high growth, strong returns and relatively low volatility, Deutsche says.
With UK loan growth expected to improve, particularly for small and medium-sized businesses, analysts forecast compound annual loan expansion of 14% through to 2028, driven by modest share gains in underserved markets.
UBS also initiates with a lower 520p target, though still implying around 20% upside.
It highlights Shawbrook’s focus on higher-yielding loan segments funded by retail deposits, with loan and deposit books compounding at double-digit rates since 2019.
Management is targeting low double-digit loan growth, a cost/income ratio heading towards 35% and high-teen returns on equity. UBS forecasts earnings growth of 17% a year between 2025 and 2028 and argues the shares look reasonable at about 1.3 times forecast tangible net asset value for a mid-teen return profile.