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Investing.com - UBS downgraded Legal & General Group PLC (LON:LGEN) (OTC:LGGNF) from Buy to Neutral on Tuesday, maintaining its price target of GBP2.75.
The financial services company has underperformed its UK life insurance peers year-to-date, despite offering one of the highest capital return yields in the subsector, according to UBS.
UBS analyst Nasib Ahmed noted concerns about the sustainability of the company’s returns, stating that the majority of Legal & General’s capital returns appear to be one-off in nature.
The investment bank identified the high payout ratio at Legal & General and its significant exposure to market risks as potential offsetting factors against the high returns currently offered.
Legal & General Group operates in the insurance, investment management, and financial services sectors, with substantial business in the UK and international markets.
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