Hargreaves Lansdown argues that Barclays’ (LON:BARC) jump in profits this year, due to fewer bad loans, does not give investors much hope, Citywire reports. The comments came as the blue-chip lender updated investors on its third-quarter and nine-month performance yesterday, revealing that litigation and conduct costs had pressured profits.
Barclays’ share price reacted positively to the update, gaining, 2.98 percent to close at 170.70p. The shares outperformed the broader London market, with the benchmark FTSE 100 index adding 7.77 points to close 0.11 percent higher at 6,962.98. This morning, the stock has started the session 0.76 percent lower at 169.41p, largely in line with a fall in the Footsie.
HL weighs in on results
Citywire quoted Hargreaves Lansdown analyst Laith Khalaf as commenting that while the rise in the group’s third-quarter profits was “all well and good, but it doesn’t give investors a great deal to hang hopes on in terms of profitability going forward” and total income is flat for the year and dipped in the third quarter.
“These latest results don’t really change the big picture at Barclays,” the analyst continued. “Progress has been made, though it’s come in fits and starts, and we’d like to see greater consistency in its performance.”
Other analysts on lender
Barclays, however, reported a drop in its nine-month profits, due to conduct and litigation charges. The BBC quoted Richard Hunter, head of markets at Interactive Investor, as commenting that although the group was “striving to consign these charges to history, investors will be relieved when they cease to become an important part of the narrative”.
UBS reaffirmed Barclays as a ‘buy’ yesterday, with a price target of 240p on the shares, while RBC continues to see the bank as a ‘sector performer,’ valuing the stock at 220p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 227.71p.