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Paragon Banking Group PLC
(LSE:PAG)
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Rating:71Outperform
Price Target:
929.00 p
▲(16.56% Upside)
Action:Upgraded
Date:08/06/26
The score is driven primarily by attractive valuation (low P/E and high dividend yield) and supportive technical momentum (price above key moving averages with positive MACD). This is tempered by mixed financial performance, particularly higher leverage and volatility in revenue and cash flow, which reduces confidence in the durability of recent results.
Positive Factors
Profitability / Margin Sustainability
Paragon reported sustained mid-teens net margins and roughly 20% operating margins in the latest annual period, reflecting durable lending economics. For a specialist lender, these margins support internal capital generation and reinvestment over multiple years, underpinning long-term earnings power.
Negative Factors
Rising leverage / balance sheet risk
Leverage has increased materially year-over-year, raising structural funding and capital risk for a mortgage-focused lender. Higher debt-to-equity reduces financial flexibility, increases sensitivity to market funding strains and could constrain growth or require higher capital buffers over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability / Margin Sustainability
Paragon reported sustained mid-teens net margins and roughly 20% operating margins in the latest annual period, reflecting durable lending economics. For a specialist lender, these margins support internal capital generation and reinvestment over multiple years, underpinning long-term earnings power.
Read all positive factors
Paragon Banking Group PLC (PAG) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£1.47B
Dividend Yield5.65%
Average Volume (3M)396.52K
Price to Earnings (P/E)8.7
Beta (1Y)1.40
Revenue Growth-6.82%
EPS Growth-7.03%
CountryUK
Employees1,413
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)0.92
Shares Outstanding182,926,900
10 Day Avg. Volume335,427
30 Day Avg. Volume396,517
Financial Highlights & Ratios
PEG Ratio4.24
Price to Book (P/B)1.21
Price to Sales (P/S)1.38
P/FCF Ratio5.23
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£1,073.33Price Target Upside34.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1.09
Revenue Forecast (FY)£512.72M
Paragon Banking Group PLC Business Overview & Revenue Model
Company Description
Paragon Banking Group PLC is a leading provider of diverse financial solutions across the United Kingdom. The company's operations are structured into three distinct divisions: Mortgage Lending, Commercial Lending, and Idem Capital. The Mortgage L...
How the Company Makes Money
Paragon Banking Group PLC makes money primarily through net interest income and, to a lesser extent, fees and other income associated with its lending and deposit franchises.
1) Net interest income (core earnings driver)
- Loan interest income: P...
Paragon Banking Group PLC Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
58
Neutral
Cash Flow
54
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.19B | 1.24B | 501.20M | 455.10M | 779.40M | 354.50M |
| Gross Profit | 429.00M | 452.40M | 501.20M | 455.10M | 604.90M | 361.30M |
| EBITDA | 253.70M | 272.30M | 260.40M | 207.50M | 423.40M | 220.00M |
| Net Income | 178.10M | 180.30M | 186.00M | 153.90M | 313.60M | 164.50M |
Balance Sheet | ||||||
| Total Assets | 19.94B | 19.93B | 19.27B | 18.42B | 16.65B | 15.14B |
| Cash, Cash Equivalents and Short-Term Investments | 1.64B | 2.39B | 2.53B | 2.99B | 1.93B | 1.38B |
| Total Debt | 2.54B | 1.71B | 1.01B | 3.10B | 4.02B | 4.46B |
| Total Liabilities | 18.38B | 18.51B | 17.85B | 17.01B | 15.24B | 13.90B |
| Stockholders Equity | 1.55B | 1.42B | 1.42B | 1.41B | 1.42B | 1.24B |
Cash Flow | ||||||
| Free Cash Flow | 355.90M | 327.80M | 2.21B | 2.17B | 1.17B | 873.80M |
| Operating Cash Flow | 357.00M | 329.10M | 2.22B | 2.17B | 1.17B | 878.10M |
| Investing Cash Flow | -1.10B | -911.10M | -424.70M | -3.10M | -2.40M | -4.30M |
| Financing Cash Flow | 1.52B | 446.00M | -2.26B | -1.10B | -595.60M | -1.44B |
Paragon Banking Group PLC Technical Analysis
Positive
797.00
Price Trends
808.41
Positive
774.30
Positive
787.12
Positive
Market Momentum
0.76
Positive
52.39
Neutral
71.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:PAG, the sentiment is Positive. The current price of 797 is below the 20-day moving average (MA) of 814.58, below the 50-day MA of 808.41, and above the 200-day MA of 787.12, indicating a bullish trend. The MACD of 0.76 indicates Positive momentum. The RSI at 52.39 is Neutral, neither overbought nor oversold. The STOCH value of 71.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:PAG.
Paragon Banking Group PLC Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | £1.72B | 6.61 | 13.06% | 7.05% | -5.67% | 8.94% | |
71 Outperform | £1.47B | 8.73 | 11.98% | 5.65% | -6.82% | -7.03% | |
69 Neutral | £129.49M | 6.84 | 6.84% | 6.87% | -6.35% | 16.23% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
59 Neutral | £1.21B | 22.51 | 7.00% | ― | 0.76% | -49.33% | |
57 Neutral | £279.53M | 11.54 | 6.44% | 2.39% | -8.35% | 5.35% | |
52 Neutral | £199.36M | 17.93 | 2.20% | 12.35% | 6.21% | ― |
* Financial Sector Average
GB:PAG
Paragon Banking Group PLC
803.50
-19.26
-2.34%
GB:ARBB
Arbuthnot Banking
800.00
-201.99
-20.16%
GB:MTRO
Metro Bank
179.60
53.80
42.77%
GB:OSB
OSB Group PLC
509.00
1.77
0.35%
GB:VANQ
Vanquis Banking Group
76.90
-31.70
-29.19%
GB:STB
Secure Trust Bank
1,510.00
501.85
49.78%
Paragon Banking Group PLC Corporate Events
Stock BuybackRegulatory Filings and Compliance
Paragon Banking Advances £50m Buyback, Updates Voting Rights
Positive
Aug 4, 2026
Paragon Banking Group PLC has continued its £50 million share buyback programme, repurchasing 726,607 ordinary shares between 28 July and 3 August 2026 through broker Peel Hunt. The purchases were executed across multiple trading venues at vo...
Regulatory Filings and Compliance
Paragon Banking Group Clarifies Share Capital and Voting Rights
Neutral
Jul 31, 2026
Paragon Banking Group PLC has reported that, as of 31 July 2026, its issued share capital comprises 189,404,960 ordinary shares, of which 4,057,046 are held in treasury and do not carry voting rights. This leaves a total of 185,347,914 voting righ...
Business Operations and StrategyExecutive/Board Changes
Paragon Banking Group Grants CEO Share Options Under All-Employee Plan
Neutral
Jul 31, 2026
Paragon Banking Group PLC has granted a new tranche of share options under its tax-advantaged Paragon Sharesave Plan 2019, an all-employee savings-based share scheme. The plan enables eligible staff to save over a fixed term and subsequently purch...
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Paragon Bank Reaffirms Guidance as Diversified Lending and Capital Moves Drive Growth
Positive
Jul 29, 2026
Paragon Banking Group PLC reported a continued strong trading performance for the nine months to 30 June 2026, with aggregate new advances up 4.3% year-on-year to £2.06 billion and its net loan book growing despite legacy portfolio run-off. M...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Paragon Banking Group Advances £50m Share Buyback, Updates Voting Rights
Positive
Jul 28, 2026
Paragon Banking Group PLC has been executing a previously announced share buyback programme of up to £50 million, purchasing its own ordinary shares on the market between 21 and 27 July 2026 through Peel Hunt. The trades were carried out acro...
Business Operations and StrategyExecutive/Board Changes
Paragon Banking Group refreshes board with new non-executive directors
Positive
Jul 22, 2026
Paragon Banking Group PLC has strengthened its board with the appointment of Andrew Stewart and Rebecca McNeil as non-executive directors, effective 1 October 2026, following an orderly succession process led by the Nomination Committee. Stewart, ...
Business Operations and StrategyStock Buyback
Paragon Banking Group Updates Market on Ongoing £50m Share Buyback
Positive
Jul 21, 2026
Paragon Banking Group PLC has continued executing its previously announced share buyback programme of up to £50 million, repurchasing ordinary shares through Peel Hunt LLP between 14 July and 20 July 2026. The purchases were made across sever...
Business Operations and StrategyPrivate Placements and Financing
Paragon Upsizes £200m Green Tier 2 Bond Amid Strong Demand
Positive
Jul 21, 2026
Paragon Banking Group PLC has completed a £200 million issuance of Green Tier 2 Bonds, carrying a 6.5% coupon and maturing in September 2036. Priced 205 basis points over the U.K. five-year gilt, the deal achieved the tightest reset spread fo...
Business Operations and StrategyDelistings and Listing Changes
Paragon Banking Group to Redeem £150m Tier 2 Notes and Cancel Listing
Neutral
Jul 21, 2026
Paragon Banking Group PLC has exercised its call option to redeem in full its £150 million 4.375% Fixed Rate Reset Callable Subordinated Tier 2 Notes due 2031 on 5 August 2026, paying principal together with accrued interest to the redemption...
Business Operations and StrategyPrivate Placements and Financing
Paragon Bank Prices £500m Covered Bond on Strong Buy-to-Let Backing
Positive
Jul 15, 2026
Paragon Bank PLC, the banking arm of Paragon Banking Group PLC, has issued £500 million of floating rate covered bonds under its £5 billion Covered Bond Programme, with the new Series 2026-1 bonds maturing in September 2029. The issue wa...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Paragon Banking Group Updates Market on July Share Buybacks and Voting Rights
Positive
Jul 14, 2026
Paragon Banking Group PLC has been executing a previously announced share buyback programme of up to £50m, repurchasing its own ordinary shares via Peel Hunt LLP between 6 and 13 July 2026. The purchases were made across several trading venue...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Paragon Banking Group boosts capital with fleet subsidiary sale
Positive
Jul 10, 2026
Paragon Banking Group PLC, a UK specialist lender and savings institution, has built a diversified portfolio that includes asset finance and previously vehicle and fleet services. The group focuses on optimising capital strength and returns across...
Business Operations and StrategyStock Buyback
Paragon Banking Group Launches £50 Million Share Buy-Back Programme
Positive
Jul 6, 2026
Paragon Banking Group PLC has authorised and commenced a new share buy-back programme of up to £50 million for its 2026 financial year. The initiative, approved by the board as part of ongoing capital management, will run from 6 July 2026 and...
Regulatory Filings and Compliance
Paragon Banking Updates Share Capital and Voting Rights
Neutral
Jun 30, 2026
Paragon Banking Group PLC has reported that, as of 30 June 2026, its issued share capital comprises 189,404,960 ordinary shares, of which 1,160,907 are held in treasury. This leaves a total of 188,244,053 voting rights in the company available to ...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Paragon Sells Specialist Fleet Services Unit to NRG for £85.6 Million
Positive
Jun 22, 2026
Paragon Banking Group PLC has agreed to sell its fleet subsidiary, Specialist Fleet Services Limited, to NRG Fleet Services Limited for £85.6 million, with completion expected in July 2026. The deal covers the entire share capital and intra-g...
Business Operations and StrategyRegulatory Filings and Compliance
Paragon Banking Group Cuts Treasury Shares, Resets Voting Base
Neutral
Jun 3, 2026
Paragon Banking Group PLC has cancelled 8,000,000 ordinary £1.00 treasury shares, representing 4.25% of its voting rights, under the Companies Act 2006. Following the cancellation, the company now holds 1,162,909 shares in treasury, with tota...
DividendsFinancial DisclosuresRegulatory Filings and Compliance
Paragon Banking Group posts half-year report and declares 15.1p interim dividend
Positive
Jun 2, 2026
Paragon Banking Group PLC has published its Half Year Financial Report and Pillar III disclosures for the six months ended 31 March 2026, making them available through the National Storage Mechanism, the London Stock Exchange website and its own i...
Regulatory Filings and Compliance
Paragon Banking Updates Share Capital and Voting Rights Figure
Neutral
Jun 1, 2026
Paragon Banking Group PLC has confirmed that, as of 31 May 2026, its issued share capital comprises 197,404,960 ordinary shares, of which 9,162,909 are held in treasury. This leaves 188,242,051 ordinary shares carrying voting rights, a figure that...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.