US BARNARD ORIEL
The outlook statement is upbeat seeing further opportunities to grow in the core UK despite the considerable changes and challenges that lie ahead. New business strain was helped by better terms in the annuity market meaning net cash generation was £846m, up 11 per cent and four per cent ahead of expectations of £817m. Target price: 162p. BUY.
KEVIN RYAN INVESTEC
We continue to view Legal & General as strategically challenged with just 13 per cent of profit generated outside the UK. If Solvency II were to insist on significantly higher levels of capital required for writing annuities, we believe this would provide the company with a serious challenge. Target price: 104p. SELL.
EAMONN FLANAGAN | SHORE CAPITAL
Legals reported a powerful set of 2011 results with the 35 per cent growth in the full year dividend, to 6.4p, the highlight. This finally lays to rest the ghost of the 2008 dividend cut and is supported by excellent cash generation, IFRS operating profits and earnings. Legals sees little prospect of a rebound in real economic growth in 2012 but remains confident of its own prospects in the risk, annuity and savings market…we tend to agree! Target price: 125p. BUY.