RBS share price steady after Credit Suisse upgrade ahead of full-year results
Royal Bank of Scotland will unveil its full-year results on Valentine’s Day, with analysts from Credit Suisse expressing their fondness for the stock ahead of the lender’s latest earnings update.
Royal Bank of Scotland (RBS) will deliver its full-year results on Valentine’s Day (14 February), with analysts from Credit Suisse initiating their coverage of the stock with fondness, offering the lender an ‘outperform’ rating.
Credit Suisse also issued a price target for RBS of 260p, which based on the stock trading at 222p as of 14:00 (GMT) on Tuesday, implies a potential upside of 17.1%.
The news will be welcomed by RBS, with the bank getting off to a poor start in 2020, with the stock down 9% year-to-date, underperforming the broader market.
Looking to trade RBS and other UK bank stocks? Open a live or demo account with IG today.
UBS remain neutral ahead of full-year results
Analysts from UBS were less upbeat about RBS’ share price, reiterating their ‘neutral’ rating for the stock in February and issuing a price target of 230p
Meanwhile, analysts from Barclays Capital downgraded RBS from ‘equalweight’ to ‘underweight’ in January, though opted to leave their target price for the stock unchanged at 225p.
Based on where RBS is currently trading, Barclays Capital believe that the stock is valued appropriately, though their rating suggests investors should consider reducing their holdings in the company.
Barclays said that its rationale for the downgrade is due to the bank continuing to see net interest margin pressure, with the restructuring efforts to support underperforming NatWest Markets and Ulster units likely to take time before bearing fruit.
‘RBS has been sustaining high returns in recent years; however, our analysis suggests net interest margin headwinds are under-appreciated (particularly if the Bank of England cuts the base rate on January 30th) and RWA inflation will also likely drag,’ Barclays Capital said in a note.
You can go long or short RBS with IG using derivatives like CFDs.
RBS no longer plagued by PPI
RBS’ newly appointed CEO Alison Rose will be hoping to deliver a strong set of full-year results on Friday - her first since taking the helm.
Thankfully for the new CEO she will no longer be plagued by payment protection insurance (PPI) charges, which have weighed on the bank’s profits, with the deadline for claims passing last summer.
Brexit uncertainty, though not completely over, has reduced significantly since the Conservative Party secured a landslide victory in the UK general election last December, giving RBS and its peers a degree of clarity over the country’s future relationship with Europe.
However, investors are eager for an update on RBS’ underperforming businesses like Ulster and NatWest Markets, as well as details on its new digital bank Bó.
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.