Jefferies maintains Buy on Plus500, saying 2026 consensus expectations are too low

Overview

This is a company research/earnings review report by Jefferies on Plus500 Ltd. The core view is that market consensus for Plus500's 2026 revenue and earnings is too low: the company delivered strong 1Q26 results, macro and market volatility should remain supportive in 2Q26, and longer trading hours, prediction market initiatives, and expansion in India could add revenue in the second half. Jefferies therefore raises its forecasts, increases the target price to £53.50, and maintains its Buy rating.

Core views

The main thesis of the report is that Plus500's earnings elasticity is underestimated. Jefferies believes the company only needs customer trading income of about $173m per quarter from 2Q26 to 4Q26 to meet market expectations, while its own forecast uses $185m per quarter and is still viewed as relatively conservative. 2Q26 volatility, 24/5 trading, a rebound in prediction markets after attention shifts away following the World Cup, and the potential of the Indian market are the main factors supporting revenue upgrades. On valuation, the report argues the stock trades at about 13x FY27E EPS, and there is room for re-rating if the company executes on diversification, improves capital returns, and makes progress on M&A or partnerships.

Analysis framework

Jefferies uses a combination of earnings forecast revisions, consensus gap analysis, scenario valuation, and relative valuation. The report first breaks down customer trading income, customer trading performance income, and net interest income to judge that the revenue hurdle implied by market consensus is low; it then estimates a target price range through base, bull, and bear scenarios; finally, it assesses the reasonableness of the target price using P/E multiples and valuation discounts versus peers.

Methodology notes

• Valuation methodRelative P/E valuation

  Apply P/E multiples based on FY26E or FY27E EPS

  The report mentions a £53.50 target price based on about 16.5x FY26e EPS with FX adjustment, while the scenario section notes that 16x P/E corresponds to a 5,350p target price.

• Forecast frameworkRevenue breakdown forecast

  Split revenue into customer trading income, customer trading performance income, and net interest income

  In its forecast, Jefferies assumes customer trading income of about $185m per quarter from April to December, net interest income of about $10m per quarter, and zero Market P&L after 1Q26.

• Scenario analysisBase/bull/bear scenarios

  Set different valuation outcomes based on customer revenue growth and profit margins

  The base-case target price is 5,350p, the bull-case is 6,200p, and the bear-case is 3,300p, reflecting different combinations of revenue growth, margins, and investor confidence.

• Catalyst analysisTracking operational and market catalysts

  Track 2Q26 updates, 1H26 guidance, new revenue streams, India, and M&A progress

  The report lists changes in management guidance, new revenue sources, FanDuel Predicts revenue, progress at Mehta Equities in India, and M&A or partnership announcements as key items to watch.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Plus500 Ltd (PLUS.LN)

  Core covered name

  Strengths

  Strong 1Q26 revenue, a favorable volatility environment in 2Q26, and additional growth drivers from longer trading hours, prediction markets, and expansion in India; the company also has capital return potential and possible re-rating upside.

  Weaknesses

  The revenue mix remains relatively dependent on trading activity and volatility, and revenue diversification may be lower than that of UK-listed CFD peers such as IGG and CMCX.

  Comparison

  The report says UK-listed CFD companies PLUS, IGG, and CMCX have all developed their businesses in recent years. PLUS may be closest to its original revenue structure, but may also be the most effective at applying its existing strengths to new markets.

  Risks

  Tighter regulation, low volatility, compliance issues, competition-driven spread compression, rising costs, IT failures, and restrictions on CFD marketing could all hinder achievement of the target price.

• IGG, CMCX

  Comparable UK-listed CFD peers

  Strengths

  They can be used as peers to compare Plus500's business diversification and valuation discount.

  Weaknesses

  The report does not provide independent investment conclusions on either company.

  Comparison

  The valuation implied by Plus500's target price still reflects a discount to some peers, and could be re-rated as diversification execution progresses.

  Risks

  Peer comparisons cannot eliminate Plus500's own regulatory, volatility, and execution risks.

• SNEX

  US trading company valuation reference

  Strengths

  The report notes that Plus500's target price implies about 15x FY27E EPS, still roughly a 2-turn discount to US trading companies such as SNEX.

  Weaknesses

  Cross-market valuation comparisons are affected by differences in business mix, geography, regulation, and investor preferences.

  Comparison

  SNEX is used to show that even after a re-rating, Plus500 may still trade below US trading company valuations.

  Risks

  If the market does not recognize Plus500's diversification or growth quality, the valuation discount may persist.

Key data

• RatingBuyJefferies maintains its Buy rating on Plus500.
• Target price£53.50 / 5,350pThe target price is raised by 2%, with the base case implying about +11% versus the current price.
• Current price4,814pThe report discloses the price of Plus500 Ltd (PLUS LN) as p4,814.00.
• 1Q26 revenue$242mIncluding a $39m loss in customer trading performance income; the report believes this still shows full-year consensus revenue is too low.
• FY26 trading revenue growth forecast4%Jefferies raises this forecast from 1% to 4%.
• FY26 net interest income forecast$41mThe report maintains its NII forecast and assumes zero Market P&L after 1Q26.
• FY26 EBITDA forecast$379mEquivalent to a 46% EBITDA margin, with earnings about 6% above consensus.
• 2Q26 customer trading income forecast$200mJefferies expects zero customer trading performance income in 2Q26 and net interest income of $10.4m.
• 1H26 total revenue forecast$452.5mUp 9% year-on-year and 20% half-on-half; excluding the $22m customer trading performance income implied in consensus, Jefferies' revenue forecast is 7% above consensus.
• Bull-case target price6,200pBased on about 8% CAGR in customer revenue from FY25 to FY27 and higher earnings.
• Bear-case target price3,300pBased on zero customer revenue growth from FY25 to FY27, a FY27 operating margin of 35%, and lower investor confidence.
• India retail equity derivatives marketabout $5.5tn annual trading volumeThe report believes India could become Plus500's next major market opportunity.
• India retail equity derivatives traders9.6m annual traders, about 4m quarterly active tradersAccording to SEBI data, as of the year ended March 2025 there were 9.6m individual retail equity derivatives traders, and despite about a 10% contraction in trading volume, around 4m people still traded on their own each quarter.

Impact & implications

If Jefferies is correct, Plus500's near-term earnings updates and medium-term guidance could drive the market to revise up its 2026 revenue and earnings expectations, leading to a valuation re-rating. The report argues that 24/5 trading, prediction markets, and the India business can not only supplement trading flow but also improve the market's view of the company's long-term growth and revenue diversification. Capital returns, potential M&A, or partnership agreements could also strengthen expectations for shareholder returns.

Risks

• Compliance breaches or unexpectedly adverse regulatory changes.
• Abnormally low volatility across multiple asset classes for an extended period, suppressing customer trading activity.
• Changes in the tax treatment of CFD products for customers or for Plus500.
• Intensifying competition leading to spread compression.
• Rising cost pressures such as marketing.
• IT system failures affecting the stability of trading services.
• New financial transaction taxes or similar policies increasing trading costs.
• New restrictions on CFD marketing imposed by search engines, social media networks, or regulators.
• Tighter regulation in markets such as India that could affect the growth path of retail derivatives.
• Uncertainty in customer trading performance income, which could cause revenue volatility.

What to watch

• The 2Q26 update on July 13 and the 1H26 trading update at the end of July.
• Whether management raises revenue or earnings guidance.
• Whether 24/5 securities trading brings net new trading flow after launch.
• Revenue growth in prediction markets and FanDuel Predicts-related business.
• Progress at Mehta Equities and gains in India market share.
• M&A or partnership agreement announcements.
• Whether volatility persists across global commodities, securities, and derivatives markets.
• Execution of capital return policies, especially buybacks and dividends.
• The impact of customer protection, negative balance protection, and regulatory compliance on P&L.