The end of this week kicks off earnings season with the four major UK banks reporting on:
- RBS, Friday 15 February
- HSBC, Tuesday 19 February
- Lloyds, Wednesday 20 February
- Barclays, Thursday 21 February
Will this turnaround continue? Which high street banking stocks could provide value for investors ahead?
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RBS (RBS) – full-year results: Friday 15 February
- Shares have bounced back after falling close to 5% at their last release, with selling resulting from increased operating costs despite profits being up 10% year-on-year. Will upwards momentum in price continue come Friday 15 February?
- Over two-thirds of analysts (69%) recommend RBS as ‘buy’.
| Buy | 69% |
| Hold | 31% |
| Sell | 0% |
| Average target price | 294.9p |
| Distance to target price | 23.8% |
| Day performance on last earnings release | -4.7% |
Data sourced from Bloomberg
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HSBC (HSBA) – full-year results: Tuesday 19 February
- HSBC delivered a robust earnings report in October 2018 which lifted shares from a two-year low of 600p.
- Shares have had a fairly stable start to 2019. Positive reaction to news of a round of trade talks between China and the US could provide increased opportunity for the Asia-focused bank.
| Buy | 32% |
| Hold | 46% |
| Sell | 22% |
| Average target price | 711p |
| Distance to target price | 10.8% |
| Day performance on last earnings release | +5.8% |
Data sourced from Bloomberg
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Lloyds (LLOY) – full-year results: Wednesday 20 February
- The UK-based lender raised the dividend and is planning to raise its share buyback scheme to £2bn in 2019.
- The stalwart of the retail investor portfolio ended 2018 trading close to the lowest price we have seen in two years, however it has made a 10% gain so far this year.
- Lloyds have announced plans to hire more than 700 financial advisers and set an aggressive target of increasing assets under management from £13bn to £25bn. It is encouraging that despite Brexit looming, their appetite for growth is far from suppressed.
- Over half of analysts (58%) recommend Lloyds as ‘buy’.
| Buy | 58% |
| Hold | 32% |
| Sell | 10% |
| Average target price | 70.5p |
| Distance to target price | 23.7% |
| Day performance on last earnings release | +3% |
Data sourced from Bloomberg
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Barclays (BARC) – full-year results: Thursday 21 February
- Shares have bounced into 2019 after plummeting to two-year lows at the end of 2018. They are some 40% away from their 2018 high with analysts on average predicting it could achieve the majority of this move.
- The usual Brexit caveats apply – Barclays have opted to move some derivatives roles to Paris in anticipation, but despite this 93% of analysts see value with a rating of ‘buy’ or ‘hold’.
- At last release, Barclays posted a 23% increase in pre-tax profit. Barclays have signalled their intent that the dividend yield will be 4.2% for 2019, and coupled with the relative low the shares are trading at, could this provide an opportunity for investors?
| Buy | 52% |
| Hold | 41% |
| Sell | 7% |
| Average target price | 203.9p |
| Distance to target price | 30.9% |
| Day performance on last earnings release | +3% |
Data sourced from Bloomberg
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*Prices and rates in tables accurate as of 11.02.19.
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