Natwest & Barclays share prices in strong form ahead of full-year results
UK bank earnings will focus on the year to come, and less on the numbers themselves, while their share prices look to build on recent gains.
ESP | % change YoY | Revenue | % YoY | |
Natwest | 8.2p | -66% | £21.6 billion | -0.1% |
Barclays | 1.6p | -96% | £10.9 billion | -16.3% |
In terms of headline numbers, it is likely to be a difficult year, but as with US banks investors will be more concerned about the year to come. This is where the outlook brightens, although it is hard for it to be much worse. The success of the UK’s vaccination programme means that it is likely that the UK economy will head back towards a greater degree of normality. Already mortgage activity is picking up, and corporate lending should also improve as companies become more confident about the outlook. The market is likely to give UK banks a ‘free pass’ on their earnings figures, so long as they can demonstrate that there are signs of improvement and that this will continue into the second half of the calendar year.
Natwest & Barclays – broker estimates and price performance
Natwest is covered by 24 brokers, of which seven have ‘buy’ recommendations, with 12 ‘holds’ and five ‘sells’. The current median target price is 182p, a 2.8% premium to the current price of 177p (15 February). Natwest sees its price move 5.5% on average on results day, while current options pricing points towards a move of 4.5%.
For Barclays, 12 analysts have ‘buy’ ratings, with 11 ‘holds’ and just two ‘sells’. Its median broker target price is 168p, a 10.5% premium to the 152p of 15 February. The average move on results day is 4%, compared to current options pricing of 2.8%.
Natwest share price – technical analysis
Natwest shares have finally managed a decent push above recent resistance around 170p, after faltering at this level since late November. A dip into 145p once again found support, and gave the price a springboard to rally to a near 12-month high. Continued price action above 170p supports the bullish view.
Barclays share price – technical analysis
The dip below 134p support in late January was a worrying moment for those hoping for a further rebound in Barclays shares, but the price recovered and has moved back towards recent highs, continuing the broader recovery that began at the end of September. This bullish view remains in place unless we move below 140p and below rising trendline support from the September low.
Better times ahead for UK banks
Like most firms, the big UK banks will be keen to put 2020 behind them. Dividends are set to return, providing a further attraction for these stocks, and from a price standpoint the recovery from the lows of autumn 2020 is intact. Much will depend on the UK’s vaccine rollout, but for now the outlook is encouraging.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.