Barclays PLC (LSE:BARC) is still the “cheapest bank around” even after Tuesday’s post-results downgrades which saw the shares sliding 6.5% to lows not seen since March.
UBS’s analysts remained bullish, saying the third-quarter update was "disappointing" but did not adequately explain the low valuation.
Barclays stock is still “worth owning”, they said, valuing the shares at 200p, down from 210p before the results but still a significant premium to the current price of 133p.
On Tuesday, the high street lender reported a 16% drop in third-quarter profits, while providing a cautious assessment of prospects.
At the same time, chief executive CS Venkatakrishnan warned there would be cost cuts, which would bring with them some serious restructuring charges.
Adjusted profit was 3% below consensus, driven by 1% lower income and 1% higher opex, the analysts noted.
Net interest margin guidance for the UK arm of the bank was "much weaker", they said, and even if the fourth-quarter level is held through 2024 it will represent a 5% downgrade to 2024 consensus earnings per share.
The benefits of management's flagged restructuring charges "could offset much of that if we knew what the firm was going to do", but an update on the details is not scheduled until February.