Deutsche Bank was a buyer of the shares of UK rival Barclays PLC (LON:BARC) before yesterday's results, and it remains so after them.
The German bank said Barclays' operating performance was solid while the better-than-expected capital ratio was a bonus.
“However, the market remains concerned about the potential headwinds in train (pensions, IFRS9, Basel, litigation, preference share redemptions to name a few),” Deutsche (DB) noted.
DB has left its forecasts for the current year unchanged, and nudged up forecasts for next year and the year after by 3%.
“Although our earnings forecasts do not move significantly, we think the results reconfirm our thesis of better cost performance in future years, whilst the capital beat provides a buffer to potential head-winds,” DB added.
Trading on 80% of their tangible net asset value (TNAV) , DB said the shares, trading at just nine times 2018's projected earnings per share, remain a 'buy.
It has upped its price target to 273p, based on a sum of the parts valuation. The shares currently trade at 225.5p.
Key downside risks relate to the cost of regulatory change, litigation, disappointing capital markets, an unexpected spike in credit costs, adverse outcomes on pension triennial agreement, and market & economic uncertainty on implications of Brexit.