{"id":63411,"date":"2023-09-20T08:31:03","date_gmt":"2023-09-20T12:31:03","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/barclays-stock-is-undervalued\/"},"modified":"2023-09-20T08:31:06","modified_gmt":"2023-09-20T12:31:06","slug":"barclays-stock-is-undervalued","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=63411","title":{"rendered":"Barclays Stock Is Undervalued"},"content":{"rendered":"
\n

Barclays\u2019 stock (NYSE: BCS) has gained 1% YTD, as compared to the 16% rise in the S&P500 over the same period. Further, it is currently trading at $8 per share, which is 26% below its fair value of just below $11 \u2013 Trefis\u2019 estimate for Barclays\u2019 valuation<\/strong>.<\/strong><\/p>\n

Interestingly, Barclays stock had a Sharpe Ratio of almost zero<\/strong> since early 2017, which is lower than 0.6 <\/strong>for the S&P 500 Index over the same period. This compares with the Sharpe of 1.28<\/strong> for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.<\/p>\n

The bank\u2019s profitability numbers were in line with consensus estimates in the second quarter of 2023. It reported total revenues of $7.87 billion \u2013 down 6% y-o-y, primarily driven by a 22% decrease in the corporate & investment bank unit. However, the negative impact was somewhat offset by a 14% rise in Barclays UK and an 18% growth in the consumer, cards and payments segment. Notably, both divisions benefited from higher net interest income due to an increase in interest rates. On the cost front, total expenses were reduced by 21% y-o-y in the quarter, thanks to a favorable drop in the litigation & conduct costs. Overall, the net income improved 24% y-o-y to $1.66 billion (Note \u2013 Barclays originally reports in GBP (Pound), the same has been converted to USD for ease of comparison).<\/p>\n

The bank\u2019s top line grew 2% y-o-y to $16.9 billion in the first half of FY 2023. It was mainly because of growth in consumer, cards & payments, and Barclays UK segments, partially offset by lower corporate & investment bank revenues. In addition, total operating expenses decreased 12% y-o-y, resulting in a 26% increase in the net income to $3.9 billion.<\/p>\n

<\/fbs-ad><\/p>\n

Moving forward, we forecast Barclays\u2019 revenues<\/strong> to touch $33.81 billion in FY2023. Additionally, BCS\u2019s adjusted net income margin is likely to remain around 20%, leading to an adjusted net income of $6.75 billion and an annual GAAP EPS of $1.69. This coupled with a P\/E multiple of just above 6x will lead to a valuation of $11.<\/p>\n

Invest with Trefis <\/strong>Market Beating Portfolios<\/strong><\/p>\n

See all Trefis <\/strong>Price Estimates<\/strong><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Barclays\u2019 stock (NYSE: BCS) has gained 1% YTD, as compared to the 16% rise in the S&P500 over the same period. Further, it is currently trading at $8 per share, which is 26% below its fair value of just below $11 \u2013 Trefis\u2019 estimate for Barclays\u2019 valuation. Interestingly, Barclays stock had a Sharpe Ratio of […]<\/p>\n","protected":false},"author":1,"featured_media":63412,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-63411","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nBarclays Stock Is Undervalued | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Barclays\u2019 stock (NYSE: BCS) has gained 1% YTD, as compared to the 16% rise in the S&P500 over the same period. 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