FTSE 100 broker upgrades: hot on L&G and Next shares
The analyst community is clearly in a good mood, with a number taking more positive stances on these blue-chip names. Graeme Evans explains the rationale.
6th August 2026 15:37
by Graeme Evans from interactive investor
Legal & General office in the City of London. Photo: Barry Lewis/InPictures via Getty Images.
Confidence in the 7% yielding shares of Legal & General Group (LSE:LGEN) continues to build after the insurer joined top-performing retailer Next (LSE:NXT) among today’s FTSE 100 broker upgrades.
The support for L&G followed Wednesday’s interim results, when chief executive António Simões reported a 7% rise in core operating profit and 2% hike in the dividend.
His drive for a “simpler, more focused” L&G has helped the shares to build a foothold above 300p for the first time since 2022, having rallied from 236p in mid-March.
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They were backed today by analysts at Barclays after the bank bolstered its Overweight stance with an improved price target of 330p.
Counterparts at Berenberg rate the shares at 385p, up from a previous estimate of 353p, after lifting core earnings per share forecasts by 6% for the current and following two years.
It said the upgrade reflected strong trends in the group’s asset management business, where Berenberg’s forecast for £600 million of operating profit in 2028 is at the top end of the unit’s £500-600 million target range.
Simões described the performance in asset management as the highlight of yesterday’s half-year results after fee-related earnings increased 37%. This was supported by record annualised net new revenue and a reduced cost-income ratio of 71%.
Berenberg also raised its forecasts for L&G’s operating surplus generation by 4% in 2026, followed by increases of 5% for 2027 and 6% in 2028.
The bank continues to expect a 2% dividend increase in both 2026 and 2027 before a 6% improvement to 24.03p a share in 2028, which will mark the start of L&G’s next strategic plan.
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The insurer plans to pay an interim dividend of 6.24p a share on 25 September, which Simões said was part of L&G’s commitment to “strong and sustainable shareholder returns”.
He added: “Our scale and the connections between our businesses remain a clear competitive advantage, which we are building further through improvements in operating efficiency. We are on track to meet or exceed our strategic targets.”
Yesterday’s results showed 7% growth in core operating profit to £918 million, while core operating earnings per share improved 11% to 12.15p.
Asset management grew operating profits by 10% to £222 million, alongside 5% increases in the institutional retirement and retail divisions to £646 million and £248 million respectively.
L&G is next due to update investors on 16 November, having moved to a quarterly reporting cycle.
Retailer Next has also been backed to continue its success after yesterday’s latest upgrade to profit guidance helped the shares close last night at a record of 15,660p.
Goldman Sachs and UBS strengthened their Buy positions by today lifting their target prices to 17,300p and 16,800p respectively, while Berenberg forecast further upside of 19% by moving from 18,000p to 18,700p.
Next yesterday upgraded its 2026 profit guidance by another 2% or £25 million to £1.24 billion after reporting second-quarter full price sales growth of 9.2%.
This was well ahead of the company’s 4% forecast and City consensus of 5.6%, boosted by favourable summer weather and the release of some pent-up demand in the Middle East and Northern Europe after a weaker first quarter.
International sales were up by 36.9% in the period, which compares with UK online’s 5%.
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Berenberg noted that Next has now produced 16 guidance upgrades over the past three and a half years, excluding beats achieved on the day of full-year results.
This follows the company’s successful building of a portfolio of over 40 non-Next brands with outright or majority ownership, all of which use Next’s online logistics. They include Russell & Bromley and the furniture business Made.
Equity stakes in branded retailers such as Reiss, Joules and FatFace – for which Next carries out online logistics – are also performing well.
Berenberg said: “We think that M&A and recently discovered international online growth potential are the main drivers at Next and would not rule out positive momentum beyond the current year.”
However, it warned that warmer weather could prove unhelpful for the start of the high-value autumn selling season, given comparisons with two helpfully cool Septembers in 2024 and 2025.
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