Barclays trades at an attractive valuation investors should consider capitalizing on, according to RBC Capital Markets.
RBC Capital Markets thinks Barclays is trading at a "good entry point" that investors should take advantage of. Analyst Benjamin Toms upgraded shares of the British bank to outperform from sector perform, saying in a Friday note that its valuation gap relative to the sector has "widened" despite Barclays' stronger performance relative to peers.
-based shares to 230 pence, or £2.30, from 215 pence, or £2.15. The price hike implies around 50% upside from Thursday's close. RBC views the market as underappreciating the benefits that structural hedging poses to U.K. banks. Barclays is poised to see the largest tailwinds given its size and larger spread between the yield of swaps rolling on and off the hedge. By 2025, this benefit should boost net interest income by 30% and 55% by 2027 from 2022, he forecasts.
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