Barclays share price: what to expect from Q1 results

Barclays has to deal with a tough economic outlook, a battle with an activist investor and a softer outlook for monetary policy as it releases its Q1 results.

When is Barclays’ earnings date?

Barclays reports first quarter (Q1) earnings on 25 April, covering its fiscal Q1.

Barclays’ results preview: what does the City expect?

Barclays is expected to report a 14.3% decline in earnings over the year, to 5.5p per share, while revenue is forecast to rise 1.9% to £5.2 billion. The firm has beaten earnings forecasts in six of the last eight reports, but missed estimates in five of the last eight quarters for revenue. Earnings dropped sharply from Q3 into Q4, so we could see a modest rebound in the near term.

The UK banks will issue their results in the wake of US bank earnings over the past week, with some major US institutions reporting a good start to the second quarter. Barclays, a UK bank with global aspirations, will need to issue a similarly robust outlook for the year, and potentially avoid an excessively-large decline in year-on-year earnings.

However, the macroeconomic backdrop is not promising for European banks generally, and perhaps is even worse for UK institutions. Low economic growth, trade wars and Brexit are all on the list of worries, and have been for a while, but now the prospect of a more dovish turn from central banks is also threatening to reduce income from lending as interest rates fall.

Q4 was a fairly weak quarter for European banks, and while some improvement is likely, the overall tone will remain cautious. Years of low profits, thanks to weaker growth and lower consumer confidence, have combined with large regulatory fines and the relentless uncertainty about the UK and its position in or out of the EU.

As an investment bank, Barclays needs to see growth in its corporate and deal-making departments, and indeed also needs to issue a robust outlook statement on this front. Cost-cutting will play a part, and it is possible that the £13.6 billion-£13.9 billion cost target will be cut in order to boost return on equity.

For Barclays, the earnings come at a time when the board is involved in a battle with activist investor Edward Bramson over the direction of the company. Bramson has fought to get Barclays to reduce its investment banking activity, in order to focus on other parts of the business. Bramson argues that the bank will need to raise fresh capital or sell off profitable parts of the business, or cut the dividend, to maintain activity at current levels. The current chief executive officer (CEO) of Barclays, Jes Staley, has been a staunch defender of the investment bank, viewing it as a crucial part of the business.

It looks unlikely at present that Bramson will succeed, but it is another distraction for the board at a difficult time for the bank, when Brexit concerns and worries about a slower global economy are making life more difficult for banks.

Barclays currently trades at 7.4 times forward earnings, more than one standard deviation below the five-year average of 9.3. This is only slightly above the 5.8 low of late December, and close to the low of 2016. This low valuation takes into account the difficult outlook, but also provides a potential opportunity on valuation grounds, with the shares now cheap on this metric.

How to trade Barclays’ Q1 results

The average one-day move for Barclays on earnings day is 3.2%, but at present implied options pricing only suggests a move of 1.75%. This is currently just below the 14-day average true range (ATR) of 1.9% for the share price; volatility in the shares has been declining since a peak in December, when the 14-day ATR hit 5, and at present the intraday moves are relatively limited.

Of 27 broker ratings, 14 are ‘Buys’, ten are ‘Holds’ and three are ‘Sells’, with a target price of 203p, 21% above the current share price.

Barclays share price: technical analysis

Barclays shares declined steadily from the beginning of May last year, and by 27 December they were down by almost a third. However, the broader market rebound then saw a steady rally from the end of December for Barclays that added 20% to the price. On the monthly chart, the stochastic momentum index has posted a bullish crossover for the first time since 2016, which has been a positive signal for the stock several times over the past eight years.

The shares have been in an ascending channel since the middle of January, with the March pullback to 153p finding support at the bottom end of the channel. The bounce has seen the shares move back to the 168p area that was the peak back in March. Further gains target 174p and the top end of the channel, while a retracement heads towards rising support around 158p.

Barclays chart

Barclays chart

Conclusion – tough quarter expected for Barclays

The tough macroeconomic environment and a softer outlook for central bank policy is expected to bear down on Barclays for the quarter, but any improvement over the expected annual decline in earnings may see the shares continue to recover. The technical outlook is more encouraging, with the 2018 downtrend now at an end, while the cheap valuation will also provide an attraction for investors.


Deze informatie is opgesteld door IG Europe GmbH en IG Markets Ltd (beide IG). Evenals de disclaimer hieronder bevat de tekst op deze pagina geen vermelding van onze prijzen, een aanbieding of een verzoek om een transactie in welk financieel instrument dan ook. IG aanvaardt geen verantwoordelijkheid voor het gebruik dat van deze opmerkingen kan worden gemaakt en voor de daaruit voortvloeiende gevolgen. IG geeft geen verklaring of garantie over de nauwkeurigheid of volledigheid van deze informatie. Iedere handeling van een persoon naar aanleiding hiervan is dan ook geheel op eigen risico. Een door IG gepubliceerd onderzoek houdt geen rekening met de specifieke beleggingsdoelstellingen, de financiële situatie en behoeften van een specifiek persoon die deze informatie onder ogen kan krijgen. Het is niet uitgevoerd conform juridische eisen die zodanig zijn opgesteld dat de onafhankelijkheid van onderzoek op het gebied van investeringen wordt bevorderd, en dient daarom als marketingcommunicatie te worden beschouwd. Hoewel wij er niet uitdrukkelijk van weerhouden worden om te handelen op basis van onze aanbevelingen en hiervan te profiteren alvorens ze met onze cliënten te delen, zijn wij hier niet op uit. Bekijk de volledige disclaimer inzake niet-onafhankelijk onderzoek en de driemaandelijkse samenvatting.

Pak vandaag nog een kans op de aandelenmarkt

Ga long of short op duizenden internationale aandelen.

  • Met de hefboom krijgt u meer marktexposure
  • Spreads vanaf slechts 0,1% op de belangrijkste aandelen wereldwijd
  • Handel in CFD's rechtstreeks in de orderboeken met direct market access

Live prijzen op de populairste markten

  • Forex
  • Aandelen
  • Indices
Verkoop
Koop
Bijgewerkt
Verandering
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Verkoop
Koop
Bijgewerkt
Verandering
-
-
-
-
-
-
-
-
-
-
-
-
Verkoop
Koop
Bijgewerkt
Verandering
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Bovenstaande koersen zijn onderhevig aan de Algemene Voorwaarden van onze website. Koersen zijn uitsluitend indicatief. Alle aandelenkoersen lopen ten minste 15 minuten achter.

Mogelijk bent u geïnteresseerd in…

Dankzij onze transparante kostenpagina ziet u gemakkelijk de kosten die met uw trades gemoeid kunnen gaan.

Ontdek waarom zoveel klanten ons kiezen en wat ons de grootste CFD-provider ter wereld maakt.

Blijf op de hoogte van gebeurtenissen die de markten kunnen opschudden dankzij onze aanpasbare economische kalender.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico met zich mee van snel oplopende verliezen. 75% van de retailbeleggers lijdt verlies op de handel in CFD’s bij deze aanbieder. Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren. Opties en turbocertificaten zijn complexe financiële instrumenten. Uw vermogen loopt risico. U kunt uw geld snel verliezen. CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico met zich mee van snel oplopende verliezen.