Barc cont18 Apr 2017 21:43
Broad Value Outlook
In aggregate, Barclays currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Barclays a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Barclays is just 0.49, a level that is far lower than the industry average of 1.72. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, BCS is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Barclays might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘F’ and a Momentum score of ‘A’. This gives BCS a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. The current year has seen one estimate going higher in the past sixty days compared to one lower, while the next year estimate has seen one upward and no downward movement in the same time period.
This has had a significant impact on the consensus estimate as the current year consensus estimate has risen by 4.8% in the past two months and the next year estimate has increased by 8.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Barclays PLC Price and Consensus
Barclays PLC Price and Consensus | Barclays PLC Quote
However, despite the bullish trend in estimates, the stock has just a Zacks Rank #3 (Hold) and we are looking for in-line performance from the company in the near term.
Bottom Line
Barclays is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, with a strong industry rank (Top 18% out of more than 250 industries) further strengthens its future growth potential. In fact, over the past one year, the Zacks Banks- Foreign industry has clearly outperformed the broader market, as you can see below:
So, despite a Zacks Rank #3, we believe that bullish analyst sentiment and favorable industry factors make this value stock a compelling pick.
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