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Why is Barclays (BCS) a Must Buy Foreign Bank Stock Now?
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At a time when most foreign banks are struggling to regain foothold amid a challenging operating backdrop, London-based Barclays PLC (BCS - Free Report) is portraying a different picture.
Not so long ago, the bank had been struggling with litigation issues and rising expenses. But, Barclays has since made a significant turnaround and is now trying to rebuild investors’ confidence. Let’s check out the company’s strengths and the reasons to add this stock to your portfolio now.
Here’s why Barclays is a Good Pick Among Foreign Banks
Earnings Strength: Though Barclays has been struggling to improve its earnings growth over the last several years, its projected EPS growth (F1/F0) is 25.25%, as against industry average loss of 4.76%.
Further, the company is expected to grow at the rate of nearly 2% over the long-term.
Restructuring Plans: Barclays has been striving to simplify operations and focus on core businesses. Hence, the company intends to divest/close operations that are not strategic. In sync with this, Barclays plans to exit Africa and simplify investment banking operations by closing offices in nine countries. All these strategies should improve the company’s profitability over time.
Expense Management: In 2013, Barclays had initiated a cost saving program – Transform – with the aim of reducing headcount along with other strategic actions. Further in 2014, additional streamlining plans were announced. All these efforts are reflected in the company’s profitability, with operating expenses showing a downward trend.
Price Appreciation: Barclays has been experiencing a solid price appreciation driven by its strong financial performance. Over the last three-months, the stock surged over 20% as compared with just over 8% for S&P 500.
Favorable Zacks Rank: Barclays currently carries a Zacks Rank #2 (Buy). The rank was driven by upward earnings estimate revisions over the last 30 days. For 2016, the Zacks Consensus Estimate increased 2.4% to $1.26, while for 2017, it rose 1.4% to $1.44.
Valuation Looks Reasonable: Barclays has a Value Style Score of ‘B’. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’, when combined with Zacks Rank #1 (Strong Buy) or #2, offer the best upside potential.
Other Stocks to Consider
Other foreign banking stocks worth a look include Itaú Unibanco Holding S.A. (ITUB - Free Report) , Banco Santander, S.A. (SAN - Free Report) and Banco Bilbao Vizcaya Argentaria, S.A. (BBVA - Free Report) . All three stocks hold the same Zacks Rank as Barclays.
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Why is Barclays (BCS) a Must Buy Foreign Bank Stock Now?
At a time when most foreign banks are struggling to regain foothold amid a challenging operating backdrop, London-based Barclays PLC (BCS - Free Report) is portraying a different picture.
Not so long ago, the bank had been struggling with litigation issues and rising expenses. But, Barclays has since made a significant turnaround and is now trying to rebuild investors’ confidence. Let’s check out the company’s strengths and the reasons to add this stock to your portfolio now.
Here’s why Barclays is a Good Pick Among Foreign Banks
Earnings Strength: Though Barclays has been struggling to improve its earnings growth over the last several years, its projected EPS growth (F1/F0) is 25.25%, as against industry average loss of 4.76%.
Further, the company is expected to grow at the rate of nearly 2% over the long-term.
Restructuring Plans: Barclays has been striving to simplify operations and focus on core businesses. Hence, the company intends to divest/close operations that are not strategic. In sync with this, Barclays plans to exit Africa and simplify investment banking operations by closing offices in nine countries. All these strategies should improve the company’s profitability over time.
Expense Management: In 2013, Barclays had initiated a cost saving program – Transform – with the aim of reducing headcount along with other strategic actions. Further in 2014, additional streamlining plans were announced. All these efforts are reflected in the company’s profitability, with operating expenses showing a downward trend.
Price Appreciation: Barclays has been experiencing a solid price appreciation driven by its strong financial performance. Over the last three-months, the stock surged over 20% as compared with just over 8% for S&P 500.
Favorable Zacks Rank: Barclays currently carries a Zacks Rank #2 (Buy). The rank was driven by upward earnings estimate revisions over the last 30 days. For 2016, the Zacks Consensus Estimate increased 2.4% to $1.26, while for 2017, it rose 1.4% to $1.44.
Valuation Looks Reasonable: Barclays has a Value Style Score of ‘B’. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’, when combined with Zacks Rank #1 (Strong Buy) or #2, offer the best upside potential.
Other Stocks to Consider
Other foreign banking stocks worth a look include Itaú Unibanco Holding S.A. (ITUB - Free Report) , Banco Santander, S.A. (SAN - Free Report) and Banco Bilbao Vizcaya Argentaria, S.A. (BBVA - Free Report) . All three stocks hold the same Zacks Rank as Barclays.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>