(Bloomberg) -- Just Group Plc shares soared to a six-year high on Tuesday as roaring demand for retirement products prompted the company to boost its guidance for the year as it continues to benefit from higher interest rates.
The British financial services firm, which largely caters to the retirement market, reported first-half profit that beat expectations. It now expects to “substantially exceed previous 2024 guidance of doubling 2021’s £211 million operating profit in three years,” Just Group’s Chief Executive Officer David Richardson said in a statement.
The stock rose as much as 18% in London, the biggest one-day gain since January 2021.
“Just has delivered an excellent set of interim results, well above expectations that blows its previous guidance out of the water,” wrote Panmure Liberum analyst Barrie Cornes. He sees the shares as having “much, much further to go” and lifted his price target to 169 pence, implying potential upside of 44% from Monday’s close.
RBC Capital Markets also raised its target, with its new objective of 175 pence being the highest of brokers tracked by Bloomberg.
Higher interest rates have accelerated the closure of funding gaps in pension schemes, Just Group said in a release, and have increased the allure of products offering a guaranteed income for retirees. The firm wrote a record amount of defined benefit new business for a first half, and expects this momentum to continue into the second half.
Just Group shares have gained 56% this year, putting them on track for their best yearly performance since the company went public more than a decade ago.
--With assistance from Joel Leon.
©2024 Bloomberg L.P.
