Plus500 Stock: Cavendish Turns Buyer After Sharp Share Slide

Cavendish upgraded Plus500 (LON:PLUS) to Buy from Hold in a note on Monday, arguing the recent selloff has left the trading platform’s valuation disconnected from its strategic progress.

The upgrade helped to lift the stock around 1% higher to 3,826p in the session.

“Since the 2Q26 trading update on 13 July, the shares have declined by 25% despite the Group delivering a strong first-half performance and reaffirming that it remains well positioned to meet current FY26E expectations,” analyst Rahim Karim wrote.

With the stock on 12.6 times calendar 2026 earnings, Cavendish said the valuation no longer reflects two years of strategic progress, particularly the expansion of the non-OTC business.

The upgrade came alongside a trimmed target price of 4,490 pence from 4,685 pence, implying 21% upside on a discounted cash flow basis.

Plus500 reported first-half revenue of $462.9 million and EBITDA of $187.5 million, in line with the July update, while earnings per share of $2.10 came 1% ahead of Cavendish’s forecast on a lower average share count. The group ended the period with $861 million in cash and announced a $182.5 million shareholder return programme, including a $100 million buyback.

Cavendish highlighted momentum in the U.S., where Plus500 launched a business-to-consumer predictions market in February and sports event-based contracts in June. The non-OTC business generated $70 million of revenue in the first half, up around 30% year over year.

The broker raised its 2026 revenue forecast by 3.2% but trimmed EPS by 1.3%, citing higher variable costs.

“Looking ahead, successful execution of the futures strategy and targeted M&A could provide further upside, in our view,” concluded Karim.