FTSE 100 round-up: L&G, M&G and Spirax under pressure
Sell recommendations have punctured the positive mood in the high-yielding insurance sector. Graeme Evans reports on today’s biggest blue-chip movers.
11th August 2026 13:29
by Graeme Evans from interactive investor
Photo: Timon Schneider/SOPA Images/LightRocket via Getty Images.
Two of this summer’s top-performing FTSE 100 index stocks today ran out of steam as insurer Legal & General Group (LSE:LGEN) slid on City caution and Spirax Group (LSE:SPX) suffered a results-day reverse.
Their declines were offset by the strength of BP (LSE:BP.) and Shell (LSE:SHEL) shares amid the impact of $88 a barrel Brent crude oil, as well as robust trading by mining giants Rio Tinto Ordinary Shares (LSE:RIO) and Glencore (LSE:GLEN).
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The FTSE 100 traded in line with other European benchmarks to stand broadly unchanged at 10,865, having been 12 points short of the 11,000 threshold in the final session of July.
Spirax started today’s session up more than 20% since 8 July, while Legal & General finished last week up by 29% compared with its position in mid-May.
L&G’s peak of 318p followed Wednesday’s interim results, when chief executive António Simões reported a 7% rise in core operating profit and 2% hike in dividend.
The figures prompted Barclays analysts to bolster their Overweight stance with an improved price target of 330p, while counterparts at Berenberg rated the shares at a record 385p.
However, an alternative viewpoint has emerged from the City this week after leading banks Goldman Sachs, Citigroup and UBS all moved to Sell recommendations.
Noting that UK life insurers have outperformed the European sector in the last three months, UBS also switched its stance on M&G Ordinary Shares (LSE:MNG) to Sell after a 33% rise since the end of March.
The bank prefers Aviva (LSE:AV.) and Standard Life (LSE:SDLF) given their forecast capital returns and key catalysts that include a turning UK car insurance market in the case of Aviva.
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The recent run by L&G has pushed shares towards the top end of UBS’ sum-of-the-parts valuation range of between 210p and 315p, a move fuelled by takeover speculation as well as the outlook for 2% dividend increases in both 2026 and 2027.
However, UBS believes that L&G’s forecast total capital return yield for 2028 of about 7.5% is no longer attractive relative to peers at 8% or higher when including share buybacks.
The bank also sees greater near-term competition in L&G’s core UK PRT (pension risk transfer) market, which represents about 60% of its earnings.
UBS adds that L&G remains the most exposed within its UK coverage to a credit downturn and that the dividend will remain above the level of capital generation in the medium term.
As a result, it believes L&G’s group solvency will likely decline by mid-single digits per year to a ratio of 184% by 2030: It added: “This solvency level would be in line with peers that screen with higher yields and lower sensitivities to market risks.”
The bank’s projections point to dividend per share growth of 5% a year over the next strategic plan starting in 2028, but with lower solvency this could be at greater risk.
Legal & General shares today fell 14.6p to 296.6p, while M&G dropped by 12.7p to 349.7p after UBS moved to Sell on the back of a rise of more than 25% so far this year.
It noted that M&G now traded with a forecast 2028 capital return of 6% versus a historical average of 9.5%, with the yield the lowest in the UK life subsector compared with Aviva at 8.5% and Standard Life at 8%.
Despite the bank’s continued support, Standard Life fell 20.5p to 912p and Aviva dropped 8p to 699p. Aviva reports interim results on Friday, followed by M&G on 3 September and Standard Life on 7 September.
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The worst-performing stock in the FTSE 100 index was Spirax, which lost 10% of its value at one point despite the engineer’s half-year results coming in ahead of the City consensus. The stock later settled 465p lower at 7,185p, which compares with 6,400p in March.
The company, which listed on the London Stock Exchange in 1959 and has been a member of the FTSE 100 since December 2018, peaked at 17,000p in November 2021 after Covid vaccines work provided a major boost to its Watson-Marlow fluid technology business.
Subsequent destocking by biopharma customers alongside broader industrial weakness and slower growth in the high-margin semiconductor sector drove shares lower.
The 130-year-old company’s two other divisions are involved in the control and management of steam and in electric thermal solutions for ultra-critical industrial applications. About 60% of its sales are to defensive sectors, such as healthcare, food and chemicals.
Adjusted revenues of £863.8 million in the six months to 30 June rose 5% on an organic basis, which was well ahead of the global rate of industrial production at 1.5% and was accompanied by a 10 basis points improvement in operating profit margin to 19.8%.
Earnings per share lifted by 9% to 150p, which compared with City forecasts at about 145.9p.
Chief executive Nimesh Patel said: “Driving growth ahead of our markets, in spite of external conditions, is now becoming embedded in how we operate and demonstrates the strengths of our business model and strategic positioning in diversified and attractive end markets.”
He backed Cheltenham-based Spirax to deliver the medium-term targets it set out in October 2024 and to move above these targets in the longer term.
Analysts at Jefferies held a Buy stance and price target of 8,740p prior to today’s results.
The bank said this morning: “The key elements of the group’s equity story continue to evolve as expected, and inflection points are all progressing well (which should continue).”
An interim dividend of 50.4p a share is due to be paid on 13 November, representing an increase of 3% on a year earlier.
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