Broker tips: Beazley, IG Group

(Sharecast News) - Analysts at Berenberg downgraded insurance giant Beazley from 'buy' to 'hold' on Tuesday after the company announced it had received a firm buyout offer from Zurich Insurance. Zurich Insurance and Beazley have agreed to the terms of a recommended all-cash offer by Zurich for the entire issued share capital of Beazley, with the offer price of 1,310p, alongside a 25p dividend per share, implying a total cash consideration of £8.1bn, or $10.8bn, representing a roughly 60% premium to Beazley's undisturbed closing price on 16 January.

"We believe this deal is likely to go through given the material premium offered to Beazley's unaffected share price. As such, we raise our price target to the cash offer price of 1,310p and downgrade our rating to 'hold'," said Berenberg.

The German bank also highlighted that it believes the deal to be "attractive for Zurich".

UBS upgraded IG Group on Tuesday to 'buy' from 'neutral' and hiked its price target on the stock to 1,600p from 1,250p as it said IG should benefit from market volatility and trading activity, but also noted that it was self-helping with revenue retention initiatives and new products.

"It is seeing positive momentum in active customers and funded accounts, and we expect this to continue, which should help drive share price re-rating," UBS said. "At our price target, IG Group would trade at 11.9x 2027E PE."

UBS forecasts for 12% per annum earnings per share growth from 2025 to 2030, reflecting strong 7% per year trading revenue growth.

"Since 2024, a key focus has been on launching new products at pace (e.g. crypto trading, free stockbroking), and enhancing revenue retention (fee and commissions to trading revenue)," UBS noted. "This is underpinned by active customer growth since Q4 24, with year-over-year growth in Funded Customers rising from 6% Q1 25 to 10% Q3 25."

The Swiss bank also noted that it sees IG's AI adoption so far as well aligned with its strategic focus on adding clients and reducing cost to serve.

"It uses an AI-driven customer support chatbot, has implemented Adclear for AI financial promotions review, and Alloy's AI-driven KYC/ AML system to automate onboarding and fraud checks," UBS pointed out.