Could Barclays (LSE: BARC) be the runaway winner in the banking sector in 2017 and beyond? Let me tell you why I think it could.
The key thing for me is that Barclays is the one that has firmly grasped the Brexit nettle, and it fully understands what it needs to do to minimise the negative effects of the UK leaving the EU.
Along with the bank’s third-quarter results, chief executive Jes Staley reiterated the goal of Barclays’ restructuring, which is to create “a simplified transatlantic, consumer, corporate and investment bank“, with the dumping of non-core businesses as quickly as possible being a key step along the way.
Looking out That more outward-looking strategy should favour Barclays over rivals more focused on the UK and the EU, although I actually remain convinced that the rest of the UK’s banks aren’t in as much danger as many seem to think.
Barclays’ slashing of its dividend in order to focus expenditure on its restructuring was a bold move, and a smart one. The others must surely be wondering, in the wake of the referendum result, whether their own strategies of ramping up their dividends as they emerge from the banking crisis are perhaps now looking a bit foolhardy. Lloyds Banking Group, for example, is still forecast to provide a yield of nearly 6% in 2017, at a time when EPS forecasts look weak.
Share price boost As a mark of confidence, investors have pushed Barclays shares up since their 2016 nadir of 121p, and today they stand at 235p. That’s an impressive performance, but it should also sound a note of caution, as it has pushed the shares up to a P/E of 18 now, based on 2016 year-end expectations — Lloyds shares are on a P/E of just half that.
Still, the City’s analysts are predicting a 50% rise in earnings for Barclays in 2017, which would drop the P/E to a more respectable 12. That’s still a relatively high rating for a bank right now, and I wouldn’t be at all surprised if we have a pause in the recent bullish run in the first half of the year. But if results continue to show positive restructuring progress, I can see an overall upwards trend continuing through the year.
What about the dividend? When will Barclays’ dividend start rising again? When the bank announced the cut at the end of 2015, we were told to expect 3p per share for 2016 and 2017, so a resumption of growth this year appears to be out of the question. And the firm’s statement that it expects to “pay out a significant proportion of earnings in dividends to shareholders over time” (my emphasis) suggests to me that if we see any rise in 2018 it will only be a small one.
But that to me reinforces the nature of Barclays strategic plans, that they really are aimed at the long term and not at satisfying shareholders with short-term pocket money.
An improving bank Barclays (LSE: BARC) has risen by 78% in the last six months as investor confidence in the sector has improved. The bank has also begun to implement a new strategy under a new management team. While its decision to slash dividends may have caused some investors to be disappointed with the short-term income return on offer, it should help to shore up the bank’s balance sheet. Alongside asset disposals which are planned, this could cause Barclays to gradually become a stronger entity which is less risky and therefore worthy of a higher valuation.
In terms of its valuation, Barclays trades on a price-to-earnings (P/E) ratio of 17.9. While high, its earnings are due to rise by 52% this year, which means that it has a price-to-earnings growth (PEG) ratio of just 0.3. This indicates that its shares could move higher and remain good value. And with dividends of 3p per share representing just 15% of forecast earnings for the current year, it wouldn’t be surprising for shareholder payouts to rise at a rapid rate over the medium term.
Ok no assassination now let's move on and give him a chance! Bit worried about the severe lack of global thinking in his intiall speeches however - come on Barc grind your way up to 260 by spring please. If Trump's policies are gonna be good for any sector I presume it will be banking - he's ****ged off most of the others so far anyway!
Barclays PLC 13.4% Potential Upside Indicated by Credit Suisse Posted by: Amilia Stone 19th January 2017
Barclays PLC using EPIC/TICKER code LON:BARC has had its stock rating noted as ‘Reiterates’ with the recommendation being set at ‘OUTPERFORM’ this morning by analysts at Credit Suisse. Barclays PLC are listed in the Financials sector within UK Main Market. Credit Suisse have set a target price of 260 GBX on its stock. This is indicating the analyst believes there is a potential upside of 13.4% from today’s opening price of 229.3 GBX. Over the last 30 and 90 trading days the company share price has increased 7.25 points and increased 46.2 points respectively.
Barclays PLC LON:BARC has a 50 day moving average of 226.62 GBX and the 200 Day Moving Average price is recorded at 182.83 GBX. The 52 week high for the stock is 267.32 GBX while the 52 week low is 121.1 GBX. There are currently 16,963,242,531 shares in issue with the average daily volume traded being 35,719,052. Market capitalisation for LON:BARC is £38,540,486,513 GBP.
Barclays PLC is a global financial services holding company. The Company is engaged in retail banking, credit cards, wholesale banking, investment banking, wealth management and investment management services. The Company’s segments include Barclays UK and Barclays Corporate & International. The Barclays UK segment incorporates the UK Personal, small UK Corporate and UK Wealth businesses, and the Barclaycard UK consumer credit cards business.
Seems to me that you've got all the basic TA indicators covered atm. --- My advice is always not to complicate things too much --- For what i'ts worth here's my two pennies worth -- The SP is currently stuck in a trading channel / range between good supp. at or around 220/222p and res. up at or around 237/240p ---- So quite a narrow trading range , which if broken on good volume either way will give 210p , first target down and around 260p next target up .--- Broker & Analyst targets from beginning of 2017 range from just below 200p up to around 260p ---- Moving Averages ( 12dma, 26, dma & 200dma ) still look good --- However, fast & slow stochastics & daily chart macd have all turned , and remain, negative --- Price Action is now below 26dma which isn't good --- Standard 14 day rsi stands on or around the 50 mark and has been dropping since the early december 2016 overbought levels --- Price Action stands almost midway between the standard bollinger bands ---
What does all this mumbo jumbo mean and where do i think the SP is going next ?? To be honest i have no idea (lol) --- But i'd be waiting for a break of the 240p res. or a re-test of the 220p supp. if i wasn't already in !! ---
JMVHO ---- and if anyone reading this post is a total TA non-believer then i really don't want to hear it cos' without a shadow of a doubt i've heard it all before !!
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