Analyst: Bank Stock Subject to Regional Uncertainties

BCS is on track for its seventh-straight loss today

Deputy Editor
Oct 26, 2023 at 9:02 AM
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Shares of U.K.-based Barclays PLC (NYSE:BCS) are 1.8% lower premarket, after BofA Global Research downgraded the bank stock to "underperform" from "neutral" and slashed its target price.

The Wall Street analyst cited uncertainty over the region's financial restructuring and near-term capital distribution risks. This comes after Barclays said it would begin another round of restructuring in the coming months, an effort to mitigate margin pressure stemming from competition in the savings market as well as lagging investment bank performance.  

On the charts, BCS is poised to open at its lowest level since March, and extend its losing streak to seven. The stock is off by 16.5% year-to-date, with nearly all of these losses piling up in the last month.

More downgrades and/or price-target cuts could be due. Of the five covering brokerages, three still rate BCS a "buy" or better, while the 12-month consensus price target of $7.31 is a 14.2% premium to Wednesday's close.  

Now may be the time to speculate on the stock's next move with options. BCS' Schaeffer's Volatility Index (SVI) of 36% sits in the relatively low 28th percentile of its 12-month range. In other words, options traders are pricing in relatively low volatility expectations at the moment. 

 

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