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Investing.com -- Deutsche Bank started coverage of IG Group with a “buy” rating and a 1,300p target price, saying the London-listed trading platform operator screens as undervalued relative to its medium-term outlook.

The initiation was led by analyst David McCann, who said the shares appear “cheap vs. the outlook,” anchored by what he described as strong core businesses and supported further by optionality in newer areas.

McCann said the brokerage’s forecasts point to a steady growth profile through FY26-29, driven by the company’s main operations and capital strength. 

Deutsche Bank projects revenue to rise 5% per year over the period, compared with IG Group’s stated target of mid-to-high single-digit percentage growth. 

EBIT is expected to increase 6% annually with a broadly stable margin, which the brokerage said aligns with the company’s implied guidance. 

EPS is forecast to grow 11% per year, helped materially by share buybacks, while dividends are expected to rise 2% annually. 

These estimates sit against a FY26 price-to-earnings multiple of 10x, or 9x excluding surplus capital, and a dividend yield of 4.2%. 

McCann said these metrics frame a valuation that does not fully reflect the group’s earnings potential and the balance-sheet flexibility available to support capital returns.

The brokerage outlined five elements that form the basis of IG Group’s investment case: over-the-counter derivatives, exchange-traded derivatives, stock trading, crypto and adjacent activities, and capital. 

According to McCann, the core OTC and ETD businesses, alongside surplus capital, account for most of the value already reflected in the current share price. 

He said these pillars provide the foundation for IG Group’s dividends, buybacks and bolt-on acquisition capacity.

Deutsche Bank said the potential upside lies mostly in the company’s stock-trading and crypto segments, as well as other adjacency opportunities that are not fully priced in. 

The brokerage also highlighted the value of IG Group’s minority stakes in Payward, the owner of the Kraken crypto exchange, and Zero Hash, a digital-assets infrastructure platform. 

McCann noted that these holdings, combined with the group’s established trading franchises, create “upside optionality” that could add to shareholder value over time. But he said the current valuation already assumes little from these areas, reinforcing the view that the stock is supported by its existing operations and capital position.

Investing.com -- European banks are positioned to extend their outperformance into 2026 as stable macro conditions, strong capital generation and further valuation re-rating continue to support the sector, according to JPMorgan’s latest sector outlook.

The Wall Street firm argues that the operating backdrop remains unusually favourable, with solid GDP growth, low volatility and stable European Central Bank (ECB) policy rates providing a foundation for steady loan growth and benign asset quality.

“We enter 2026 with a continued and reconfirmed positive view on European banks operating in a ’perfect’ environment,” supported by two key drivers, JPMorgan analysts led by Kian Abouhossein said.

These include a solid macro backdrop of improving GDP growth alongside stable rates, inflation and unemployment, and continued bottom-up strength reflected in expected 5.5% annual pre-provision profit growth and 9.7% earnings growth through 2027, supported by share buybacks.

Valuations are also central to JPMorgan’s bullish call. The sector trades on 8.9 times 2027 earnings, which the analysts see as attractive given forecast returns on tangible equity (RoTE) of 16.2% that imply a cost of equity near 11%. The analysts expect this to fall toward 10% in 2026, creating “at least 12% upside over the next year.”

Over the long term, JPMorgan argues the discount to the broader market should narrow further as fundamentals strengthen.

JPMorgan also notes that banks are generating positive operating leverage, keeping cost growth to 1.7% annually versus revenue growth of 3.6%.

Moreover, capital buffers remain strong, with the sector able to absorb an estimated 268 basis points of provisions before profits turn negative. Total shareholder payouts are projected to remain near 8% a year, combining dividends and buybacks.

The bank’s preferred names continue to lean on valuation and capital strength. JPMorgan maintains a bottom-up approach, keeping Barclays, NatWest, Deutsche Bank and Société Générale on its Top Picks list while adding Caixabank, Standard Chartered and Erste.

Analysts said they “continue with our preference for European banks over U.S. banks,” even after Europe’s Stoxx 600 Banks index has outperformed the U.S. KBW Nasdaq Bank Index by 40% year-to-date.

The team argues that the two-year forward price-to-earnings discount of 17% versus U.S. banks “is too high,” noting that this is more in line with lower-quality U.S. regional lenders, while large U.S. money-center banks trade near 11.7 times 2027 earnings.

Potential risks remain, including lower-than-expected interest rates, political uncertainty in France, and increasing competition for deposits.

Investing.com - European stocks traded in a muted fashion Tuesday, struggling for momentum as investors await key monetary policy decisions during the final month of the year.

At 03:05 ET (08:05 GMT), the DAX index in Germany climbed 0.1% and the FTSE 100 in the U.K. gained 0.1%, while the CAC 40 in France dropped 0.1%. 

Global monetary policy in spotlight  

European equities traded lower on Monday, a gloomy start to December, but are still on track for healthy annual gains, helped by raised expectations that the U.S. Federal Reserve will cut interest rates next week.

Both the German DAX and the FTSE 100 in the U.K. are on course for 2025 winnings of over 18%, while the CAC 40 in France trails with just 10% gains as political uncertainty has weighed.

Traders are pricing in an 87.2% chance of a quarter-point Fed rate cut, according to the CME FedWatch Tool, while the Bank of England is also widely expected to cut interest rates this month given signs of cooling inflation and lackluster growth, especially after the tax rises detailed in last week’s Autumn Budget.

Remaining in Europe, flash inflation data for the eurozone, due later in the session, is expected to show annual inflation just above the European Central Bank’s medium-term target, though this is unlikely to shift the rates outlook much because markets expect the ECB to stay on hold through 2026.

European repurchases to boost momentum in 2026

Aside from help from central bank policies, analysts at Barclays also see the potential for robust momentum next year in the European corporate sector.

European companies repurchased €19.3 billion worth of shares in November 2025, near the peak level since 2017, according to Barclays in a note dated Tuesday.

Share repurchases accounted for 2.3% of European equity trading volume during the month, with energy firms and financial institutions generating more than 2.5% of volume through buybacks alone. Fourth-quarter execution has run above historical averages, the analysts noted.

The critical factor supporting continued strength is unexecuted capacity. Approximately 70% of 2026 buyback programmes remain outstanding, whilst Barclays’ probability model projects roughly €50 billion in fresh announcements during the first quarter. 

Barclays forecasts 8% earnings per share growth for European equities in 2026. Automotive manufacturers, telecommunications operators and energy companies currently offer the highest free cash flow yields amongst sectors.

Crude prices edge higher

Oil prices retained a positive tone Tuesday, as Ukraine peace hopes remained fragile, tensions are mounting between the U.S. and Venezuela and a group of major producers has lifted output levels.

Brent futures climbed 0.1% to $63.20 a barrel, and U.S. West Texas Intermediate crude futures rose 0.2% to $59.41 a barrel.

Both benchmarks advanced more than 1% on Monday, with the WTI  contract near a two-week high.

Ukrainian President Volodymyr Zelenskiy said on Monday that Kyiv’s priorities were to maintain sovereignty and ensure strong security guarantees, adding that territorial disputes remained the most complicated sticking point.

U.S. envoy Steve Witkoff is due to brief the Russian authorities Tuesday, but an immediate end to the approaching four-year long conflict appears unlikely.

Tensions between Washington and Caracas have also become heightened after U.S. officials signalled they may tighten restrictions on Venezuela, which is seen as having the largest oil reserves in the world, including closing their airspace.

On Sunday, the Organization of Petroleum Exporting Countries and allies, known as OPEC+, reaffirmed a small oil output increase for December but also a pause in increases in the first quarter of next year due to rising fears of a supply glut. 

Investing.com -- RBC Capital Markets revised ratings across UK housebuilders on Tuesday, upgrading Persimmon and Taylor Wimpey to “outperform” while downgrading Berkeley Group to “underperform” and Barratt Redrow to “sector perform,” prioritizing strategic land holdings over market recovery bets.

"The leaders in 2026 will be those focused on self-help and strategic land," analysts Anthony Codling and Oliver Dyson wrote, as "seemingly lackadaisical local authorities have not played ball with planning, and infrastructure investment has not kept pace with the Government’s homebuilding aspirations," according to the brokerage.

Just 1,410 sites with over 10 plots gained approval between April and June 2025, "marking the tenth successive quarter of decline" and representing "the lowest rolling outturn recorded since the data series began two decades ago," according to the report. 

Average private sales rates across the sector remain at 0.5 to 0.6 per outlet per week,"not as good as the help to buy years or the COVID race for space, but much, much better than they were during the GFC."

Site numbers remain constrained despite mortgage approvals returning to April 2015-to-COVID levels. 

RBC Elements data shows total available homes rising to approximately 14,000 across covered builders, though year-over-year site growth turned positive only recently after extended declines.

Persimmon received an “outperform” rating with a price target of 1,750 pence, up from 1,375 pence under its previous “sector perform” rating.

The company operated 272 average outlets in the second half of 2025 versus 262 year-prior, achieving 3.8% year-over-year growth. 

RBC Elements data shows 7.7% year-over-year outlet increases on its website with 6% growth over three months.

The brokerage describes Persimmon as "leading the field when it comes to site openings" while "working hard to drive demand through a combination of innovative mortgage products, a growing build to rent/partnerships operation" and maintaining sector-leading vertical integration. 

RBC forecasts 6.1% volume growth in 2025 and 5.4% in 2026, with gross margins expanding 87 basis points in 2025 and 20 basis points in 2026.

Taylor Wimpey’s upgrade to “outperform” came with a price target increase to 150 pence from 130 pence. 

The company disclosed 100% of sites needed through 2026 already have planning permission, over 90% for 2027, and approximately 65% for 2028. Its controlled landbank spans 75,651 plots representing 6.6 years of forward supply.

RBC forecasts 4.7% volume growth in 2025 and 3.3% in 2026, with gross margins declining 130 basis points in 2025 before recovering 24 basis points in 2026 and 89 basis points in 2027. 

The company operated 212 average sites in 2025 with expectations for 223 in 2026 and 240 in 2027, representing 5.2% and 7.9% growth respectively.

Berkeley dropped to “underperform” with a price target cut to 3,700 pence from 4,900 pence. The November budget introduced council tax surcharges from £2,500 to £7,500 on properties exceeding £2 million starting April 2028, while property income tax rates increase 2 percentage points from April 2027. 

The Office for Budget Responsibility estimates 10 basis points annual house price inflation reduction from 2028.

RBC cut Berkeley’s FY2026 pre-tax profit estimate 34% and FY2027 by 54%, reflecting expectations that "the mansion tax and the increased taxation on landlords will impact London focused Berkeley more than any other housebuilder we follow." The company’s landbank spans 13 years of forward supply across 67 average sites.

Barratt Redrow’s downgrade to “sector perform” included a price target reduction to 450 pence from 575 pence. 

The brokerage noted "a trip and slip in the building safety due diligence" following its Redrow acquisition, adding "in terms of volumes, so far, the whole is less than the sum of its parts" while operating without a Group CFO.

The combined entity operated 405 average outlets in FY2025 versus 443 prior year. RBC forecasts flat site numbers in FY2026 before 6.2% growth in FY2027, with volume growth of 5.1% and 8.2% respectively. Pre-tax profit estimates fell 5% for FY2026 and 10% for FY2027.

Build costs rose approximately 25% since September 2022 while house prices stalled, creating "limp lettuce landbanks" where margins eroded on land purchased over three years. 

At sales rates of 0.5 homes per site weekly, "a 150 unit site will take around three years to sell through," delaying recovery until sites clear the profit and loss statement.

RBC forecasts 0 to 50 basis points gross margin improvement across most builders in 2026, significantly below consensus. 

Savills cut 2026 house price inflation estimates to 2% from 4%, with RBC data showing "the average weekly house price change is c.£100 lower (more negative) than this time last year."

Bellway maintained “sector perform” at 3,150 pence, Crest Nicholson held “outperform” at 205 pence, Vistry kept “underperform” at 475 pence, and Gleeson remained “underperform” at 400 pence.

Investing.com -- As the broader market experienced significant volatility in November due to shifting interest rate expectations and growing concerns about AI overvaluation, the best opportunities appeared beyond the mega-cap space.

In fact, the broader repricing of the AI trade meant that capital moved from year-to-date winners such as Oracle, Palantir, Microstrategy, and Nvidia toward earlier-stage, higher-growth names across the small- and mid-cap spaces.

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• Haemonetics (NYSE:HAE): +62.67% in November ALONE
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• Holley (NYSE:HLLY): +48.43% in November ALONE
• Seers Technology (KQ:458870):+68.75% in November ALONE

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At the start of each month, our AI refreshes each strategy with up to 20 stock picks. These selections are based on a blend of more than 150 well-established financial models compiled by our machine learning model on over 15 years of financial data worldwide.

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Disclaimer: Prices mentioned in articles are accurate at the time of publication. We regularly test different offers for our members, which may vary by region.