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(Sharecast News) - Analysts at JP Morgan reiterated their 'overweight' stance and 210.0p target price on shares of Barclays, telling clients that the lender's earnings recovery was on track despite management's messaging on costs.
All told, the investment bank bumped up its estimate for Barclays's earnings per share in 2021 by 6%, while it kept its EPS estimates for 2022/23 unchanged, in anticipation that higher costs would be offset by revenues and impairment.
In particular, they highlighted how Barclay's actions, including the real estate restructuring, would likely be accretive to the group's cost-to-income ratio in 2022/23.
And yet consensus did not currently expect the lender to achieve its 60% CIR target by 2023.
Furthermore, in a follow-up call, Barclays's finance chief, Tushar Morzaria, reiterated that the commercial and investment bank's comp accrual was driven by returns, implying lower comp pressures over the rest of 2021.
The analysts continued to also see "scope for significant improvement in Barclays' Retail & Cards revenue into 2022, with consumer borrowing likely to increase and management likely to adjust structural hedging to reflect increased deposit balances and a steeper yield curve."
On the flip-side, JP Morgan was now assuming that Barclays would book a £0.5bn one-off charge for the real estate review in the second quarter.
The underlying cost run-rate meanwhile was now seen at approximately £14.0bn.
17 Oct 2023 15:43
UK earnings, trading statements calendar - next 7 days
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