Deutsche Bank has lifted its valuation on Barclays (LON:BARC), arguing that the lender had sent a strong statement of confidence with its dividend and promises of buy-backs, Proactive Investors reports. The news comes after it emerged this week that the FTSE 100 group had handed out more than £20 million in shares to its senior executives despite having recently revealed that it had made a loss last year.
Barclays’ share price has fallen into the red in today’s session, having given up 0.91 percent to 207.80p as of 10:25 GMT. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.23 percent higher at 7,155.29 points. The group’s shares have lost more than eight percent of their value over the past year, as compared with about a 2.7-percent dip in the Footsie.
Deutsche Bank lifts valuation
Deutsche Bank lifted its price target on Barclays from 234p to 250p yesterday, while reiterating its ‘buy’ rating on the shares. Proactive Investors quoted the broker’s analyst David Lock as commenting that with the bank’s capital position now removed as the main market concern, focus was turning to revenues.
“After stabilising in 2017, Barclays needs to deliver c.£2.5bn revenue growth over 2018-19 in order to reach its RoTE target of >9%,” the analyst pointed out. The comments came after the group updated investors on its annual performance last month, reporting a full-year loss, while revealing a rise in its CET1 ratio and announcing plans to restore its 6.5p-per-share dividend this year.
‘Cause for some optimism’
Deutsche Bank’s Lock noted that while forex headwinds were a near term issue, there was ‘cause for some optimism,’ including expected growth for UK and US retail banking as well as strong potential for improvement in corporate revenues.