Legal & General Shares Outlook: Stock Hits New Highs Despite Jefferies’ Bearish Call

Legal & General Group (LON: LGEN) shares touched fresh 52-week highs above 310p in mid-July, extending a rally that has left one of the FTSE 100’s most bearish analyst calls looking increasingly out of step with the market.

The insurer’s stock has climbed roughly 20% since Jefferies downgraded it to “Underperform” with a 185p price target in early May, citing valuation concerns alongside a similar cut to rival Aviva. Shares dipped 2.6% on the day of that call but have since powered past 296p, comfortably above both the 50-day and 200-day moving averages.

The rally comes as Legal & General presses ahead with the largest share buyback in its 190-year history. The £1.2bn programme, launched in March following the £1.8bn sale of its US protection business to Meiji Yasuda, is being executed in weekly tranches, with the company most recently cancelling 1.15 million shares in mid-July. Combined with a 2% increase to the dividend, management has pledged to return more than £5bn to shareholders between 2025 and 2027.

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Full-year results in March showed core operating profit up 6% to £1.6bn and earnings per share growth of 9%, at the top end of guidance, alongside a pro forma Solvency II ratio of 210%. However, the shares initially sold off 5-6% on the day amid concerns over investment variances and a newly disclosed medium-term solvency target range of 160-190%.

Analyst opinion remains sharply divided. Berenberg lifted its target to 353p in July, while consensus sits closer to 267p — leaving a wide gap between bulls and bears as investors weigh the insurer’s simplification strategy, pension risk transfer momentum, and a dividend yield still above 7%.