The German investment bank Berenberg has made a well-reasoned case as to why we should be offloading shares in Barclays (LON:BARC) at the current valuations.
Borrowing from (if slightly misquoting) Ecclesiastes 3:1, or the Byrds, its note, entitled To Everything a Season, argues Barclays strategy thus far has delivered “meaningful benefits” thus far.
Key to this has been “stemming investment bank revenue attrition and extinguishing risks to the share count”.
After that, the vision fails to enthuse analyst Peter Richardson.
“The next phase, to improve returns, faces challenges as the US credit cycle turns and temporary investment tailwinds yield to structural headwinds,” said Richardson in a note to clients.
“We question the emerging solution, which appears to focus on growth of the international businesses, aided by a loosening of absolute cost control.
“We struggle to see a return to meaningful dividend before 2019 and, in the meantime, believe total drifts sideways.”
Repeating his ‘sell’ recommendation, Berenberg’s Richardson reckons shares in Barclays are worth no more than £2 each.
In early afternoon trade they were changing hands for £2.15 each, up 1.25p on the day.
Of the 13 analysts logged as following Barclays only two have ‘sell’ recommendations. There are six ‘buyers’, while remainder think the stock is fully valued. The consensus price target is 240p.