Deutsche Bank Backs IG Group With ‘Buy’ Rating and 1,300p Target

Analysts say the trading platform is undervalued, forecasting strong earnings, reliable cash returns and untapped growth opportunities

Deutsche Bank has initiated coverage of IG Group with a “buy” rating and a 1,300p price target, arguing that the London-listed trading and investment platform is significantly undervalued relative to its medium-term outlook. The bank believes IG’s core businesses, capital strength and emerging growth segments offer a compelling blend of stability, profitability and upside potential.

The research note, led by analyst David McCann, highlights how the shares look “cheap versus the outlook”, with forecasts pointing to consistent growth across revenues, earnings and dividends between FY26 and FY29.

Why Deutsche Bank is Bullish on IG Group

1. Strong Forecast Growth Across the Business

Deutsche Bank’s projections show:

• Revenue growth: Expected to rise 5% per year through FY26–29.
• EBIT growth: Forecast to increase 6% annually, with stable margins.
• EPS growth: Predicted to climb 11% per year, boosted by share buybacks.
• Dividend growth: Expected to rise 2% annually.

These estimates compare favourably with IG Group’s own targets, which aim for mid-to-high single-digit growth over the medium term.

2. Valuation Looks Undemanding

Despite this growth profile, IG Group trades on:

• A FY26 P/E multiple of just 10x
• Or 9x when adjusting for surplus capital
• A dividend yield of 4.2%

McCann argues that these metrics do not fully reflect the company’s earnings strength or the flexibility afforded by its robust balance sheet.

3. Five Pillars Underpinning IG’s Investment Case

Deutsche Bank identifies five strategic areas that frame IG Group’s value proposition:

• Over-the-counter derivatives (OTC)
• Exchange-traded derivatives (ETD)
• Stock trading
• Cryptocurrency trading
• Capital and balance-sheet strength

The research suggests that IG’s core OTC and ETD operations, combined with surplus capital, already account for much of the valuation — leaving other areas underappreciated by the market.

4. Upside From Growth Segments Not Yet Priced In

According to Deutsche Bank, meaningful upside could come from:

• Expansion in stock-trading services
• Growth in crypto trading and digital assets
• “Adjacency” opportunities such as new asset-class offerings
• Value from minority stakes in Payward (owner of Kraken) and Zero Hash, both influential players in the crypto-infrastructure space

These areas contribute “upside optionality” — potential added value that the market currently attributes little weight to.

What This Could Mean for Investors

A Strong Core With Optional Upside

For investors seeking exposure to global trading, derivatives and digital-asset markets, IG Group offers a blend of defensive strength and growth potential. The core OTC and ETD segments are stable, high-margin and supported by long-term customer engagement.

Attractive Valuation

Trading at around 10x forward earnings with a 4.2% dividend yield, IG looks appealing compared with many fintech peers. The valuation suggests the market may be underappreciating the company’s earnings trajectory and balance-sheet efficiency.

Shareholder Returns Look Sustainable

Regular dividends and ongoing share buybacks support total returns. Rising EPS — lifted by both earnings growth and reduced share count — may further reward long-term holders.

Growth in Stock and Crypto Trading Could Provide a Boost

If IG gains traction in newer segments such as crypto and equities, or if its minority stakes appreciate in value, the market could re-rate the stock higher. These factors add an element of strategic optionality not currently priced into forecasts.

Risks to Monitor

• Trading volumes fluctuate with market volatility
• Regulatory changes could impact leverage or onboarding
• Crypto-related earnings are inherently cyclical

However, Deutsche Bank’s analysis suggests that IG’s diversified business model and cash reserves position it well to navigate these risks.

Conclusion

Deutsche Bank’s “buy” rating and 1,300p price target underscore the belief that IG Group is undervalued and positioned for consistent medium-term growth. With strong fundamentals, rising earnings, dependable shareholder returns and promising optionality in emerging areas, the stock may offer an attractive opportunity for investors seeking both stability and potential upside.

Sources: (Investing.com, Reuters.com)