IG Group Holdings Plc's (LSE:IGG) trading update this week was “impressive” and surprisingly positive, analysts at RBC Capital Markets highlighted as it repeated a bullish rating and lifted forecasts.
The Canadian bank's London-based analyst team rates the trading platform operator as an "Outperform", and increased its target price to 1,850p from 1,600p, implying around 21% upside to the current market level.
RBC noted that IG’s update “surprised positively” across both first-quarter numbers and second-quarter commentary, leading the bank to raise revenue estimates by 4%, 5% and 6% for CY26, CY27 and CY28 respectively. Also, adjusted EPS forecasts were increased by 6%, 5% and 7% across FY26, FY27 and FY28, while dividend forecasts were also nudged higher.
The broker now expects 12% organic revenue growth in FY26, with total revenue growth of 14%, followed by 8% organic growth in both FY27 and FY28.
“Supportive market conditions have helped shine a light on the progress being made at IG, which is now a veritable growth company, offering strong capital returns and tactical appeal amid the current geopolitical uncertainty,” RBC said.
It also pointed to IG’s capital returns, noting that the company has announced almost £1 billion of buybacks over and above dividends since July 2022.
RBC said the investment case had been “re-energised” under chief executive Breon Corcoran, with marketing, customer targeting and product roll-out all identified as areas of improvement.
Despite the shares trading at a premium to their seven-year average earnings multiple, RBC said the valuation remained “undemanding” at 12.3 times CY26 earnings, given IG’s high margins, strong cash generation, negative net debt and improved growth outlook.
Deutsche Bank struck a similar tone, reiterating a Buy rating and lifting its price target to 1,750p from 1,650p, and analyst David McCann said the beat was driven by higher volatility in the period, particularly in IG’s core OTC business, more than offsetting slightly weaker outcomes elsewhere.
DB noted that management has raised FY26 organic revenue growth guidance to 10–15%, from high single digits previously, while future-year guidance has moved to at least 10%.
EBITDA margin guidance remains in the mid-40s, which DB said likely reflects higher revenue being reinvested into customer acquisition and marketing. “We view this as a robust update,” McCann said.