Barclays share price: Jefferies remains bullish on lender

Jefferies has maintained its bullish stance on Barclays (LON:BARC), while lifting its price target on the shares. The move marks a boost for the blue-chip lender which has been under pressure from activist investor Edward Bramson who has been pushing for a board seat ahead of the group's annual general meeting.

Today’s trading has seen a small rise in the Barclays share price, with the group’s stock having gained 0.36 percent to 168.28p as of 13:48 BST. The shares are marginally underperforming the benchmark FTSE 100 index which currently stands 0.56 percent higher at 7,478.37 points.

Jefferies sees Barclays as ‘buy’

Jefferies lifted its target for Barclays share price from 263p to 280p today, while maintaining its ‘buy’ rating on the shares. Proactive Investors reports that the broker, however, has lowered its forecast for pre-tax profit in 2019 and 2020 by about eight percent, and believes that the bank’s target for return on tangible equity (ROTE) is only achievable when viewed on an allocated equity basis.

“Management could respond to this dynamic via the cost lever and we await further details on cost guide either at first quarter or first half results,” Jefferies pointed out.

The analysts expect slower corporate and investment banking results in the first quarter and for the remainder of the year, and sees modestly lower margins in the Barclays UK business this year.

Near-term earnings flex

Proactive Investors further quoted Jefferies as saying that Barclays’ chief financial offer, Tushar Morzaria, had referenced the £1.6-billion compensation pool in the investment bank as a source of near-term earnings flex so there would seem to be “greater near-term visibility on cost flex than for markets-related revenue”.

The comments come as the lender prepares to update investors on its first-quarter performance on April 25, ahead of the group’s AGM on May 2.