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Barclays share price outperforms as Berenberg turns bullish on bank

Tsveta van Son
  • October 1st 2018, 13:58
  • Last Updated: October 21st 2019, 15:11

Shares in Barclays (LON:BARC) have climbed higher in today’s session, outperforming the broader UK market, as Berenberg lifted its rating on the blue-chip lender. Proactive Investors quoted the analysts as arguing that the group has the “strongest franchise of any non-US bank in the profitable US investment bank market”.

As of 13:41 BST, Barclays’ share price had added 0.92 percent to 173.36p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.15 percent lower at 7,499.26 points. The group’s shares have lost more than 10 percent of their value over the past year, as compared with a near two-percent gain in the Footsie.

Berenberg Bank says ‘buy’

Berenberg hiked its rating on Barclays from ‘hold’ to ‘buy’ today, lifting its price target on the shares from 200p. to 220p, flagging improved returns from the group’s investment banking arm.

“Despite our cautious investment bank revenue outlook, and past concerns around strategy, the market’s expectation of a 5.5-percent return on tangible equity (RoTE) from Barclays’ investment bank is too low,” the broker pointed out, as quoted by Proactive Investors, adding that the group had “the strongest franchise of any non-US bank in the profitable US investment bank market and is gaining market share”.

The analysts believe that Barclays’ investment bank returns could “rise towards nine percent by fiscal year 2020 with group returns bolstered further by its best-in-class UK business”.

Other analysts on Barclays

Credit Suisse, which also rates the FTSE 100 lender as a ‘buy,’ hiked its price target on the shares from 235p to 240p last week. According to MarketBeat, Barclays currently has a consensus ‘buy’ rating and an average price target of 228.11p.

As of 13:59 BST, Monday, 01 October, Barclays share price is 173.40p.

About the author

Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.

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