Analysts from Bank of America recommend purchasing shares of Barclays.
Bank of America Praises Barclays' Q1 Performance, Sticking to 'Buy' Rating
In a jubilant tone, Bank of America analysts patronized Barclays' exemplary first-quarter performance, maintaining their optimistic 'buy' recommendation on the stock.
Geopolitical apprehensions leading up to the results were deemed rational, but the lender smashed expectations by registering a robust £2.7bn pre-tax profit, surpassing the projected £2.5bn.
This remarkable achievement was substantiated by a staggering 16% surge in income generated from its investment arm, climbing to £3.9bn.
Brisk transactional activity in global markets amplified earnings, following an influx of stock sell-offs prompted by Donald Trump's contentious tariffs on trading partners.
Analysts beamed with satisfaction, stating, "It was gratifying to see the investment bank, particularly the markets business, seize opportunities in the quarter." They further asserted, "There were no indications of tension in the underlying credit quality within the US Consumer business."
Rebound of Barclays' Stock Post-Tariff Anxiety
Barclays added £74m to its reserve for soured loans, attributing the increment to "elevated US macroeconomic uncertainty." Given its extensive exposure to geopolitical hostilities, Barclays suffered a substantial blow when Trump announced 'Liberation Day,' plummeting by almost ten percent.
However, following Trump's concession on tariffs, the lender clawed back lost ground, trading evenly with its previous month's price.
Bank of America analysts raised their 2025 revenue prediction for Barclays by approximately one percent to £28.8bn, crediting its impressive first-quarter showing. Despite this optimistic outlook, analysts have not adjusted their future year forecasts, tagging the improvement as "primarily investment bank-driven."
They anticipate underlying profit before tax to amount to £9.1bn for the year. They issued a word of caution about the motor finance judgment, cautioning that potential commission redresses could pose a downside risk to the bank.
Barclays has earmarked £90m for the car mis-selling scandal. The Supreme Court is slated to deliver a verdict on the utilization of discretionary commission agreements in the early summer. If an adverse judgment is rendered against lenders, the Financial Conduct Authority has promised to implement a redress scheme within six weeks.
- Despite the elevated US macroeconomic uncertainty, Barclays added £74m to its reserve for soured loans, highlighting the impact of the geopolitical tension.
- Following Trump's concession on tariffs, Barclays clawed back lost ground, trading evenly with its previous month's price, demonstrating a rebound post-tariff anxiety.
- Bank of America analysts praised Barclays' impressive first-quarter showing, raising their 2025 revenue prediction for Barclays by approximately one percent to £28.8bn, attributing it to the bank's robust performance.
- The anticipation for underlying profit before tax for the year is £9.1bn, as mentioned by the Bank of America analysts, who have not adjusted their future year forecasts, tagging the improvement as "primarily investment bank-driven."
- Potential commission redresses from the motor finance judgment could pose a downside risk to Barclays, according to the analysts, who have earmarked £90m for the car mis-selling scandal.
- The Supreme Court is set to deliver a verdict on the utilization of discretionary commission agreements in the early summer, which could have a significant impact on the business and finance sectors, given the extensive use of such agreements.
