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Investing.com -- Barclays (LON:BARC) has raised its price target for Just Group (LON:JUSTJ) shares to 220p from 185p following its first-half 2025 results, while downgrading the stock to “equal weight” from “overweight,” due to recent gains in the share price.
The revision reflects a reduction in the discount rate applied to the company’s valuation from 14% to 12%, supported by what Barclays described as robust organic capital generation and a strong capital position.
The first-half results fell short of expectations across most key measures, with adjusted operating profit, the company’s preferred earnings metric, down 23% to £192 million.
Lower new business volumes and margins contributed to the decline. Barclays noted that the bulk annuity market, where Just is a major participant, is “lumpy” and seasonally weighted, with an average of 64% of transactions occurring in the second half of the year. Management remains optimistic about the pipeline, a view echoed by industry peers.
Just Group has also agreed to a £2.4 billion takeover by Brookfield at 220p per share in cash, subject to shareholder and regulatory approval.
The vote is expected in the second half of 2025, with completion targeted for the first half of 2026, after which the company would be delisted.
Barclays said its long-term assumptions remain largely unchanged, citing the company’s capital ratio improvement from 136% in 2018 to about 200% since 2022, in line with peers.
Despite lowering the discount rate, the recent share price movement led to the Equal Weight rating, as the potential upside from the new target is 4.8% from the 6 August closing price of 210p.