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Investing.com - Goldman Sachs downgraded Legal & General Group PLC (LON:LGEN) (OTC:LGGNF) from Buy to Neutral on Wednesday, setting a price target of GBP2.49.
The investment bank cited concerns about dividend coverage following Legal & General’s recently announced US protection transaction, despite the company’s plan to return approximately 40% of its market capitalization over the next three years.
Goldman Sachs noted that while Legal & General maintains confidence that its dividend is covered by proforma net surplus generation, market participants may wait for concrete evidence before sharing this confidence.
The downgrade also reflects Goldman’s concerns about potential increased competition in the UK bulk annuity market, with new entrants possibly creating downward pressure on margins over time.
Goldman Sachs further highlighted expectations for heightened competition in the UK individual annuity space during 2025, as competitors enhance their operational capabilities.
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