Barclays PLC (LON:BARC) got a lift from Deutsche Bank today as its German peer upgraded its stance for the UK lender to 'buy' from 'hold'.
In a note to clients, analysts at the German bank also raised their price target for Barclays to 270p from 198p, saying the group is well placed for 2017.
The Deutsche Bank analysts said: "Improved capital markets conditions should help soften a weaker top-line in retail, whilst we see opportunity for cost reductions in the IB & non-IB businesses.
“Meanwhile we expect credit costs to remain robust given better macroeconomic data and credit performance history, and capital remains on-track.”
They added that there are still risks for the bank, with Barclays inherently exposed to capital markets revenue conditions and the UK economy, while the lack of clarity on regulatory rules and the risk of trapped capital, particularly in the US, also remain an issue.
However, they said the credit quality of the bank's retail book looks robust, while the capital ratio has the benefit of the sale of its Africa business being in train.
The analysts noted that Barclays shares have performed well since the US election in November, but they reckon there is still more upside to come.
In early morning trading, Barclays shares were up 1.5p at 236.75p.