Legal & General PLC (LON:LGEN) shares edged higher on Thursday as Citigroup raised its target price for the FTSE 100-listed insurer while questioning whether the company is “Safe as houses or a house of cards?”
Citigroup raised its target price for L&G shares to 242p from 224p, which in morning trade on Thursday were trading at 202.30p, up 0.3% on Wednesday’s closing price.
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In a note to clients, the US bank’s analysts said: “In our recent sector note we upgraded L&G to Buy and from subsequent investor discussions it is clear that it remains one of the most polarising names in the sector.”
They added: “Bulls point to growth opportunities, competitive advantages, a strong track record of avoiding defaults and a solvency position that can absorb further shocks.
“Bears worry about sector leading credit gearing, the level of BBB holdings, the opacity created by direct investment holdings and capital generation dividend cover.”
The analysts concluded: “We ultimately come down on the side of the Bulls and re-iterate our Buy recommendation.”