Newspaper article The Evening Standard (London, England)

Barclays on the Drift as Citi Slashes Target Price

Newspaper article The Evening Standard (London, England)

Barclays on the Drift as Citi Slashes Target Price

Article excerpt


CITIGROUP has cut its price target for Barclays, and warns that theCity's expectation for earnings may still be too highjust days before the High Street bank gives its latest trading update.

Barclays' shares drifted 2 1 2 p to 449p as the American broker cut its targetfrom 400p to 350p to reflect weaker revenues at Barclays Capital, which hasbeen the powerhouse behind the overall bank's profits in recent years.

It has dropped its earnings forecast for 2008 from 65.3p a share to 48.6p andfor next year from 68p to 57.9p. Citigroup today told clients: "Few debate thatconsensus earnings are too high, but we believe the extent to which they mayhave to come down could surprise, and is not reflected in the share price." Thecredit crisis has taken a heavy toll on the banking sector. Royal Bank ofScotland, unchanged at 347p, and the UK's biggest mortgage provider HBOS, 4pdearer at 509p, have already turned to shareholders for extra funds to patch uptheir balance sheets. Some in the City reckon Barclays may also need to followthat route. Meanwhile, HSBC firmed 1p to 867p ahead of a trading statement thatis expected to reveal more big subprime write-offs.

Share prices generally ticked better in thin trading despite Friday's sell-offon Wall Street. The FTSE 100 index rose 25.5 points to 6230.2.

Standard Life enjoyed a rare spurt of activity, adding 9p to 266p afterCitigroup raised its rating from hold to buy.

Dana Petroleum surged 93p to 1873p after discovering oil at its East Rinnes oilfield in the North Sea. Initial analysis indicates the oil is similar to thehighquality crude discovered at West Rinnes, and to that being produced by Danain the nearby Hudson field.

UBS has downgraded Dairy Crest , off 16 1 2 p at 456 1 4 p, from buy to neutraland slashed its target from 720p to 500p.

The broker says that, despite a portfolio of decent brands and a scaleadvantage in the fresh dairy category in the UK, it believes Dairy Crest'sbusiness model means it cannot escape the changing conditions in the dairymarkets. …

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