3i Group PLC (LSE:III) was kept at a 'buy' rating by UBS, with analysts maintaining confidence in the FTSE 100-listed private equity company’s long-term growth prospects despite near-term weakness in its key holding, Action.
However, UBS cut its 12-month price target to 4,000p from 4,400p, still implying 24.07% upside from the 17 December closing price of 3,224p.
The broker said like-for-like trends at Action, which makes up 3i’s largest asset, are likely to remain weak until January 2026 due to softness in the French market.
Outside of France, however, UBS said growth prospects remain intact and expects comparable sales to recover from early 2026.
The upcoming Action capital markets seminar in March 2026 is seen as a potential catalyst, where updates on new store growth and the US expansion feasibility study are expected.
Longer term, analysts forecast 5% annual like-for-like growth from 2026, with total sales growth of 15–17% per year supported by new store openings and short break-even timelines.
UBS’s revised DCF valuation for Action stands at £49.5 billion, and values 3i’s 62% stake at 1.1x carrying value, supporting the case for upside in the shares.