Barclays share price surges as Deutsche Bank flags earnings growth this year

on Jan 9, 2017
Updated: Oct 21, 2019

Shares in Deutsche Bank have jumped more than one percent in London this morning, outperforming the broader market, as analysts at Deutsche Bank turned bullish on the stock. The broker argues that the UK group is well placed for earnings growth this year.

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As of 08:47 GMT, Barclays’ share price had added 1.04 percent to stand at 237.70p, outperforming the benchmark FTSE 100 index which has climbed marginally higher and is 0.29 percent better off at 7,230.85 points. The group’s shares have gained some six percent over the past year, as compared with an over 22-percent rise in the Footsie.
Deutsche Bank lifted its stance on Barclays from ‘hold’ to ‘buy’ today, and hiked its price target on the shares from 198p to 270p, arguing that following a year of restructuring, transition to a new reporting structure and favourable macro trends, the bank has kicked off the year well placed for earnings growth.

“Improved capital markets conditions should help soften a weaker top-line in retail, whilst we see opportunity for cost reductions in the IB & non-IB businesses,” the broker pointed out, as quoted by Sharecast, adding that it also expected Barclays’ “credit costs to remain robust given better macroeconomic data and credit performance history, and capital remains on-track”.
The comments are a boost for the UK group, whose chief executive Jes Staley has been looking to turn Barclays into a transatlantic bank, focused on operations in the UK and the US.
Deutsche Bank cautioned that there were still risks, with Barclays inherently exposed to capital markets revenue conditions and the UK economy, while the lack of clarity on regulatory rules and the risk of trapped capital, particularly in the US, also remained. The analysts, however, see more upside to the shares even if they have performed well since the US election in November.
As of 09:23 GMT, Monday, 09 January, Barclays share price is 237.20p.


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