UK bank shares, especially Lloyds Banking Group PLC (LSE:LLOY) and NatWest Group PLC (LSE:NWG), have "still more to go" once this round of earnings and next week's Budget are out of the way.
That is the view of Deutsche Bank, where analysts hiked share price targets across the FTSE 100 lenders, with the Lloyds Banking target lifted to 83p from 64p (last close at 62p) and NatWest to 460p from 350p (last close 358.7p), while Standard Chartered PLC was also given a big increase to 970p from 825p.
For the other two the target price increases were not as large: for Barclays PLC (LSE:BARC) the target was lifted to 320p from 280p, for HSBC Holdings PLC (LSE:HSBA) to 830p from 825p.
"We remain positive on UK banks through the UK budget, through Q3 results, and in the medium term," said analyst Robert Noble.
"We expect that clearing up tax uncertainty will end up positive for share prices and focus can turn to improving money growth trends supported by government debt."
The analyst said mortgage margin growth should pick up again in the medium term as rates normalise.
"Our preference remains for the more predictable revenue and TBV growth of the domestic UK banks over HSBC/Standard Chartered," with Lloyds the most preferred UK bank.