Barclays (NYSE:BCS) stock rose Friday following an upgrade from RBC Capital Markets. RBC said Barclays is currently trading at a “good entry point,” creating a promising opportunity for investors. U.S.-listed shares of the bank have shed about 1.5% in 2023.
Barclays reported a solid set of 1Q23 numbers, helped by positive seasonal influences, with no change to management’s FY23E outlook.
Commentators report Barclays shareholders have had a bumpy ride since this winter. Some agencies’ Strong Buy call was based on a cum-dividend price of 175.88p (in London in February). Adjusting for the 5p per share dividend, when BCS traded down to ~130p in March 2023, my February call was underwater by around 24%. Short-term volatility is an almost constant feature of equity markets, and research and stock calls are medium-term focused. The collapses of SVB Financial and Credit Suisse triggered a wave of weakness in bank share prices and recent news flow regarding the U.S. regional banking sector suggests that investors may again have further opportunities to purchase bank stocks on fear-driven dips.
BCS delivered a strong return on tangible equity figure of 15% in 1Q23. For investors more interested in ROE, allowing for the carrying value of goodwill and intangibles reduces the 1Q23 return to a still respectable ~12.7%.
BCS shares took on only four cents to $7.72.
