Broker tips: M&G, IHG

RBC Capital Markets downgraded M&G on Tuesday to ‘sector perform’ from ‘outperform’ and cut the price target to 200p from 220p as it turned more cautious on asset management.

The bank said headwinds for asset management now appear more acute and persistent than it expected.

"While acknowledging positive impacts of the higher rate environment on M&G’s Life insurance earnings and capital generation, which supports upgrades to group adjusted operating profit, our cautious outlook for AM means we are below consensus for 2024E/25E," it said.

"Given M&G’s year-to-date total shareholder return of 20%, and the material de-rating of UK Life and Euro AM sector peers with each sector returning -4% YTD on average, we reduce our conviction in the shares."

Analysts at Berenberg downgraded their recommendation for shares of hotel operator IHG from 'buy' to 'hold'.

In a research note sent to clients, they said that they remained bullish on the long-term structural growth drivers of the hotel industry and still thought that IHG was "well placed" to benefit from them.

However, that was "broadly" already in the price in their judgement, while financing challenges and the geopolitical backdrop posed near-term risks.

Hence, there judged that there was little scope for a re-rating.

Furthermore, their estimates were in line with those of the market, so the shares looked fairly valued.

Their target price for the shares was lowered from 6,500.0p to 6,000.0p.