IG Group Holdings Plc (LON: IGG) shares fell another 2.5% to around 950p on Monday after Panmure Liberum substantially reduced its earnings forecasts and price target following last week’s trading update.
The broker cut its target price to 1,500p from 2,000p, although it retained its Buy recommendation.
Panmure said the key issue was the sharp deterioration in over-the-counter revenue retention, which fell to approximately 70% during the third quarter from an average of around 80% since the second half of 2025.
That volatility has made IG’s core earnings more difficult to forecast despite continued growth in customer activity.
The broker reduced its 2026 revenue forecast by 8.1% to £1.175 billion.
Its adjusted EBITDA estimate was cut by 18.3% to £478.8 million, reflecting both weaker revenue expectations and the lower margin outlook disclosed by IG.
Forecast adjusted earnings per share were reduced by 14.9% to 115.4p, while estimated year-end net cash was cut by approximately 33% to £162.9 million.
The revisions follow IG’s warning that 2026 Group revenue growth is now expected to be in the mid-single-digit percentage range, while its EBITDA margin is expected to fall into the low-40s.
Panmure stressed that the weakness represents a retention miss rather than a customer miss.
IG reported that OTC customer income increased approximately 8% year-on-year, organic first trades grew more than 25%, and organic active customer numbers increased around 17%.
That means trading activity and customer acquisition remain healthy, but IG retained a smaller proportion of the income generated from that activity during Q3.
The broker now forecasts fourth-quarter revenue of £294.4 million.
Achieving that figure will require OTC revenue retention to recover towards its recent historical average, which Panmure identified as the main downside risk to its revised forecasts.
IG’s rapidly growing Underdog business remains another potential source of upside, after quarterly net revenue more than doubled year-on-year to approximately $105 million.
Panmure also continues to view IG’s customer growth and net cash position positively.
However, it has reduced the valuation multiple applied to the shares to reflect the increased uncertainty around short-term revenue conversion.
For investors, the central issue remains straightforward: customer engagement has not deteriorated, but IG’s ability to convert that activity into revenue has become substantially less predictable.
The next important test will be whether OTC retention recovers in Q4. If it does, Panmure’s revised forecasts could prove achievable; if retention remains near the Q3 level of 70%, further earnings downgrades would become a material risk.
Investor takeaway: IG Group shares fell another 2.5% after Panmure Liberum cut its 2026 EBITDA forecast by 18.3% following last week’s profit warning. The broker argues that IG’s problem is currently revenue retention rather than customer demand, but the sharp Q3 deterioration has made near-term earnings materially less predictable.
