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Barclays Bank – a cheap stock, technically
Is Barclays finally on the cusp of a long-awaited rerating? Former City analyst Robin Hardy runs the numbers
Investors in Barclays have been waiting a long time for its share price to outperform, but is an about-turn in the offing?
Barclays (BARC) has been out of favour for a long time, since the financial crisis in 2008 in fact. The share price has gone nowhere in the past 10 years, underperforming the FTSE All-Share by 25 per cent. Investors' total return has been just 3 per cent a year – the FTSE 100 has delivered 6.3 per cent and global equities 13.5 per cent in that time. But on most valuation measures, the shares look cheap and in FY2021 Barclays is expected to report a near-fourfold increase in earnings per share (EPS). Could it be on the cusp of a rerating, or are there still too many warning signs telling private investors to steer clear?
Profits are rising: good management or good fortune?
This is the billion-dollar question and sits at the heart of whether or not Barclays’ discounted share price makes the shares a bargain or correctly valued. If good fortune is the catalyst, then improvements may not be sustainable and returns may be of too low quality to justify a change in valuation. Barclays is forecast to report EPS of 34p this year (to December 2021), a level to which it has not come remotely close since 2008. But what is driving this sudden and substantial surge in profit forecasts?
Investment banking storm: There has been a surge in private equity buyouts, merger & acquisition (M&A) activity and initial public offerings leading to a strong increase in fees at Barclays' investment banking operations. However, the current rate of equity market activity is not sustainable and this typically feast-and-famine market is likely to slow. Lower activity also usually leads to lower fee rates, compounding any slowdown in market momentum. Barclays is currently making positive returns in this historically poorly regarded segment (it is volatile and requires a lot of capital) but how long can that last?
Market share gains: Further to the broader surge in equity market activity, Barclays has benefited from other European banks pulling out of the game, leading to much higher market share. The likes of Credit Suisse and Deutsche Bank have substantially scaled back investment banking on the continent, which is likely to be playing a large part in the board’s confidence that Barclays can avoid a major collapse in investment banking fees – there is no else left in Europe with whom the US banks can look to partner. While there are market share positives in investment banking, there are potential threats in personal banking. Challenger banks such as Metro, Starling, Virgin Money and Monzo have already nibbled some market share, but there is a much bigger threat from US banks coming to the UK.
In general the s and p 500 is a bit toppy , though the bubble is in the tech sector, traditional stocks look pretty fairly priced to my eye. We may be in for some corrections depending on the next few months data then hopefully the orange one unseats Brandon come November. If the us data holds up and the orange one wins I can realistically see well north of 2.50 here by year end.
Hi LivD
Barcs lost what it gained yesterday thanks to the US stock market sell offs that have affecting most of the UK other stock too. If hadn't be for yesterday afternoon sell off barcs would be pushing for 1.99 2.03.
Damn yanks economy😐
Should have invested earlier. gaining traction. Let's see where it leads
Good Evening The.Crowman
I'm invested also in Barclays and can assure you that once the blue eagle passes the £2 territory, nothing will stop it flying higher up where many have dreamed for so long. Love is in the air. Will be posting more in Capita and here over the next few days. Have a good one😉👍💪🏻
So far £222 million of shares purchased - total size of the buy back is £1 billion.
NOFEAR - You spreading the love here? Do not neglect CPI now you have gone long.
I went £220k long here a month ago here. Sell target £2.25.
Jay K - I get it . It was Russia/Ukraine that time but there has been 'something else' other times. My mistake has been (for example) I will sell some when it gets to 200p, it gets there, I think, this will probably go a bit higher I will sell when its gets to 220p, it drops back a little, I think shall I sell at 190p, I say, no it will get back to 200p and as soon as it gets there I am shifting some, it then doesnt get there! :) Yes flexibilty is key but actually taking action is the big one for me!!!
Latest Barclays Brokers Ratings From FactSet(.)com Terminal Monitor.
Institutional Investors Investment grade software. This a snapshot taken from the Barclays company as seen in my FactSet account. Its the latest and very comprehensive. You won't find it anywhere else here in this BB. Very premium data. Free to download.
It will be up for three months.
Click here to View or Download the image --》》https://ibb.co/tC3Smsw
@Razzledazzle - That was when Russia/Ukraine kicked off, nothing to do with greed as soon as that happened you could sell quickly anyway. I don't think fixed targets are very good thing to look at, wishing for £2 last year in a very difficult economy could be completely different to this year. Things are changing constantly and I think you need to flexible. By all means take your profit if you've been burnt before, or just set a stop loss in case things turn south, you might not maximise your profit or hit your target, but you'll get profit with the chance of gaining more profit if it rises. Personally I think greed is a good thing and we are all a bit greedy otherwise we wouldn't be trying to get "more".
Not teaching you to suck eggs, just a bit of chit chat.
ATB.
Could be sage advice razzle dazzle. I regret not getting out at 215 2 years ago.
The Latest Barclays Shares Brokers Ratings including the Jefferies Latest Buy with TP of £3.30
This is a screengrab from my own premiun account that I've subscribed with FactSet(.)com and its from an institutional investors grade terminal monitor platform. Its the same professional software that also the Abrdn Fund use inhouse along with the Bloomberg Terminal Monitor.
Click and see it here below😉https://ibb.co/x3B4PGn
About 2.5k invested. Been waiting for it to get off the starting line for a while now. 200p is in it's sights. I expect a slight trace back as people take profit (including me). Might go higher than 200p (say 250p) but could take a while. I'm looking for a bigger, faster return which is less susceptible to scandal which BARC seems to have suffered from in recent times.
I am also loving this recent rise however (sorry to be a doom merchant) but I remmeber just over 2 years ago (jan 2022) it was sitting around 215 and I thought we could see 3 quid by the end of that year! You know what happened next.
Long may it continue to rise but I have been 'greedy' in the past and not sold when it reached a target price. I have then sold some over the years and see it rise. I am always invested in this but all I will say is, I hope I learnt that if I have a target price I will stick to it. (easier said than done when all is looking rosy!)
Not much but I have 10k shares with 133 average. I was planning to sell at 200 but would wait for it to double now.
Qube must be looking at a loss the thick end of 30m relating to this short. Must say I'm gutted for them.
https://shorttracker.co.uk/company/GB0031348658/
I understand your dilemma exactly. I was of the view to sell at 200 but seemingly banker's are mean reverting so aiming higher might be smart. I will ponder this on my bike sometime.
Held this since 2021, paid too much at 181 but now will hold for a decent return, may start setting a stop at about 230
This has been a dog for a while. Mainly self-inflicted, but it seems real momentum is finally building. Once, fingers crossed, it breaches 200, it may well run fairly quickly to 230-250. I had promised myself that I would sell above 200...but...
Thanks Nofear, 330 looks a tad optimistic to me. I could reasonably see 2.50 which would be a slight discount to TNAV and a pe around 8. I don't want to waste another 5 years waiting for Billy bunters postal order to arrive.
Hi Bloomers_Blower
According to the EUROPE RESEARCH ROUNDUP latest broker rating that was published on the 02/April/2024.
Barclays BARC.L : Jefferies raises target price to 330p from 220p
Don't always agree with the Jefferies brokers who in the past have been responsible for crashing UK company stocks, whilst at the same time have also created a major rally on a UK stock. Moreover, sometimes they've over talked a stock that were also sitting as their commercial investment banking advisors. So, always do your own diligence.
Nice divi banked £9669.69
I've had this wretched share 5 years and now finally it's come food. I'm holding 90k shares having averaged down to 1.60 so I'm not exactly doing that well. My planned out is 2.30. When are other ppl thinking of throwing in their chips here?
Morning All, Hope everyone has had a good Easter break. @Nofear - Jan 2022 we were at 2.20 before the conflict in Russia started and cause economic changes which hurt stocks. I am positive and long as I have said a few times, keep posting good numbers, markets are up beat, economic stability etc etc, really is a fundamental long this one, I say that as a someone who obsesses with charts with my day trades. All the best.
I agree wrt short selling: it's often close to market manipulation! No-one in the City will agree (in turn closely linked to the government), it's all part of the big gravy train, which small, mostly uninformed investors are paying for.
This petition is not getting much traction though, very slow uptake. I'm wondering whether it is has been "advertised" enough.
I have signed.