Friendless and listless: That’s the best description of Royal Bank of Scotland PLC (LON:RBS), which seems to have fallen out of favour with the City’s sell-side analysts.
Of the 15 analysts tracked by the Broker Forecasts site, six are ‘sell’ or ‘strong sell’, the same number have ‘neutral’ recommendations, with only three outright ‘buyers’.
In the last six months, sentiment towards the state-controlled bank appears to have cooled with the median price target down from a tad over 320p a share to 223p today.
The last output from the brokers came from Deutsche Bank, which on Monday downgraded to ‘sell’ from ‘hold’.
Deutsche made the cut as part of wider assessment of the financial sector post-Brexit.
The central thesis put forward by analyst David Lock was that UK interest rates were likely to remain lower for longer than had been anticipated prior to Britain’s vote to quit the EU.
“We think RBS is most at risk near- and medium-term due to the already low deposit rates, additional restructuring charges and likely lack of a dividend until 2018,” Lock said in a note to clients.
He says RBS is worth 170p (down from 200p previously). He used the research note as springboard for a cut to Lloyds Banking Group PLC’s (LON:LLOY) rating (hold from buy).
“Lloyds should benefit short-term from falling deposit costs and potential sub-debt redemptions.
“However, we see risks from re-mortgage churn in the medium/longer-term.”
At 12.30pm, Lloyds shares were changing hands barely changed at 58p each. RBS, which has fallen around 16% in the last three months, was up 1% at 199p.