Legal & General Targets 2025 Core Operating EPS Growth Between 6-9%

Legal & General Group Plc reports a strong start to 2025, projecting core operating EPS growth between 6-9% and expressing confidence in achieving its 2028 targets. The company anticipates operating profit of 500-600 million pounds by 2028, representing a 6-10% CAGR from 2024-28, driven by an increase in fee-related Asset Management earnings to 70-75% and a reduction in the cost-income ratio to below 70%.

Analysis

Legal & General Group Plc has communicated a positive operational update, indicating a strong commencement to 2025 and affirming its alignment with its three-year strategic targets. The company projects a notable 6-9% growth in core operating earnings per share (EPS) for 2025. Furthermore, Legal & General expresses strong conviction in its 2028 targets, which include achieving an operating profit between £500 million and £600 million, representing a compound annual growth rate (CAGR) of 6-10% from 2024 to 2028. This anticipated growth is underpinned by a strategic shift in its Asset Management division, where 70-75% of earnings are expected to become fee-related, coupled with a targeted reduction in the cost-income ratio to below 70% by 2028. The announcement carries a 'strongly positive' sentiment and an 'optimistic' tone, suggesting favorable reception, while the 'moderate' market impact score indicates this guidance reinforces current expectations rather than causing a significant market shift.

Key Decisions for Investors

• Investors should evaluate Legal & General's execution capability regarding its strategic pivot to higher fee-related earnings within Asset Management and its ability to realize the projected cost-income ratio improvements by 2028.
• The forecasted 6-9% core operating EPS growth for 2025 and the 6-10% operating profit CAGR through 2028 serve as critical benchmarks for assessing the company's growth trajectory and validating its current market valuation.
• Given the optimistic forward-looking statements and specific financial targets, investors might consider reviewing existing holdings or exploring new positions, particularly if seeking exposure to a company with clearly defined medium-term growth and profitability objectives.