3i Group Shares Hits New Low as Analyst Downgrade Signals Slowing Momentum

Shares of 3i Group PLC (LON: III) tumbled to a new low of 3,242 pence this week, driven by a recent analyst downgrade that highlighted concerns over the company’s growth trajectory. The investment firm's stock price decline reflects the market's sensitivity to revised outlooks and the potential impact on market sentiment.

The shares are down -7.83% year-to-date, underscoring the negative reaction to Kepler Cheuvreux's revised assessment. The stock's performance reflects the broader market's response to concerns about 3i Group's future earnings potential and overall valuation.

Kepler Cheuvreux analyst Jon Perez downgraded 3i Group from “Hold” to “Reduce,” significantly lowering the price target from 4,100 pence to 3,150 pence. This decision was based on the analyst's assessment of slower momentum within the company, which, in turn, warrants a lower valuation. The downgrade suggests a more cautious outlook on 3i Group’s ability to sustain its previous levels of performance.

However, other financial institutions have presented differing perspectives on 3i Group's prospects. UBS Group maintains a “Buy” rating with a target price of 4,700 pence, indicating a potential upside of approximately 12.12% from the previous close. Rothschild & Co Redburn also assigned a “Buy” rating, setting a target price of 4,750 pence, which suggests a possible increase of about 7.95% from recent trading levels. These contrasting viewpoints reveal the divergence in analyst expectations for 3i Group's future performance.

Despite the recent market turbulence, 3i Group's financial position remains robust. The company's first-quarter performance update for FY2026 revealed an increase in net asset value (NAV) per share to 2,711 pence, up from 2,542 pence as of March 31st.

The company achieved a 7% total return during the period, supported by a £392 million foreign exchange translation gain. The company also reported strong liquidity, with £428 million in cash and an undrawn £900 million revolving credit facility, resulting in total liquidity of £1,328 million and a gearing ratio of 3%.

The recent downgrade by Kepler Cheuvreux has contributed to a decline in 3i Group's share price, reflecting concerns about the company's growth momentum. However, other analysts maintain a positive outlook, and the company's strong financial position suggests potential for future recovery. The market's reaction to the downgrade highlights the importance of analyst assessments in shaping market sentiment and influencing stock valuations.