Plus500 Ltd (LSE:PLUS) has been upgraded to ‘buy’ from ‘hold’ by Cavendish, which said a 25% fall in the shares since the company’s July trading update has left the financial technology group undervalued.
The broker set a 4,490p target price, reduced from 4,685p, representing around 21% upside from the 3,714p share price used in its valuation. Plus500 shares have fallen 11.6% over 1 month and 16.3% over 3 months, although they remained 18.8% higher over 12 months.
Cavendish said the weakness came despite a strong first half and management reaffirming that Plus500 remained positioned to meet full-year expectations. The shares were trading at around 12.6 times estimated 2026 earnings, which the broker believes fails to reflect progress in expanding beyond the group’s traditional over-the-counter business.
First-half revenue was $462.9 million and EBITDA was $187.5 million, while EPS of $2.10 was 1% ahead of Cavendish’s forecast. Period-end cash stood at $861 million and Plus500 announced $182.5 million of shareholder returns, including a new $100 million share buyback.
Cavendish highlighted growth in Plus500’s US operations, with non-OTC revenue reaching $70 million, or 15% of group revenue, during the first half, up around 30% year on year.
The broker raised its 2026 revenue forecast by 3.2% but cut its EPS estimate by 1.3%, reflecting higher variable costs and the stronger Israeli shekel. It expects total shareholder returns of about $352 million in 2026.
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