London, May 4, 2026, 20:01 BST
Jefferies downgraded Legal & General Group Plc to Underperform early Monday, slicing its price target down to 185 pence from 230 pence. The call comes ahead of UK market open and questions the FTSE 100 insurer’s ability to deliver on its income promise. Analyst Derald Goh flagged a “deteriorating” income picture. He said dividends are now “fully consuming” the firm’s solvency surplus—the extra capital above regulatory requirements. TipRanks
This call carries weight — L&G’s reputation as a go-to income stock is well established. Shares most recently finished at 254.90p, Hargreaves Lansdown data show, yielding 8.55% and valuing the group at just over £14.21 billion. The new price target from Jefferies lands about 27% beneath that last close. Hargreaves Lansdown
No regular-session test right out of the gate. With the London Stock Exchange shut on Monday for the Early May bank holiday, traders will have to wait until Tuesday for the first full market response to the downgrade. MoneyWeek
The downgrade comes just days after L&G announced it had secured FCA approval to offer Targeted Support—initially targeting workplace pension savers whose entire defined-contribution, or DC, pension is held in cash. DC pensions hinge on how much is paid in and how the investments perform, with no guaranteed salary-based payout. Legal & General Group
L&G’s tests showed 85% of recipients actually wanted to read the targeted-support material. Of those, 95% said the information was easy to follow, and 93% knew what steps to take next. Laura Mason, who heads L&G’s retail business, described the approval as an “important milestone.” Paula Llewellyn, head of DC and workplace savings, added that receiving support at the “right moment” helps people take action. Legal & General Group
The FCA says targeted support allows firms to tailor suggestions for specific groups of consumers sharing similar traits, stopping short of full-blown personal advice. The watchdog puts the number of consumers underserved by advice and guidance at roughly 23 million. The rules took effect April 6, following an application window that opened March 2. FCA
Rivalry is picking up. On Saturday, The Guardian said Quilter and Royal London had been granted early access to the service. Barclays, for its part, voiced support for the new framework and said it planned a launch. The Guardian
Jefferies isn’t buying the growth story. Analyst Goh pointed out that L&G’s regulatory surplus is just scraping by—enough for the dividend, but not much left over for additional capital returns or bold balance-sheet action. Solvency ratios keep slipping and leverage sticks out as an ongoing issue. TipRanks
L&G management has dismissed concerns over its capital position in the past. Following March numbers, Chief Executive António Simões told Reuters the company felt “very comfortable” with its solvency ratio. This came as annual core operating profit landed at £1.62 billion, a shade under forecasts, and the Solvency II cover ratio slipped to 210% from 232%—a key financial strength indicator. Reuters
The company’s share count keeps dropping. A May 1 regulatory filing put L&G’s voting shares at 5,634,995,043 as of April 30, after the firm bought back 14,532,991 shares for cancellation on April 29 and 30—cutting the post-settlement total to 5,620,462,052. Investegate
The risk is clear enough. Should surplus generation fade or markets push up against the capital buffer, L&G could find itself weighing dividend growth against buybacks and balance-sheet wiggle room. If targeted support pays off, retail pensions might get the growth story it needs. But if that approach falls flat, it risks turning into just another regulated expense, not a new source of inflows.
