Barclays plc, RBS: Can today's recovery be extended in the short-term? BARC seen as more bullish than RBS

 

Barclays plc and Royal Bank of Scotland Group are both higher this morning correcting higher after the sell-off witnessed yesterday.

Can these gains be sustained though?

Barclays is forecast to maintain an upward bias provided support at 245 is maintained. An analysis conducted by Trading Central says, "as long as 245 is not broken down, we favour an upmove with 311 and then 338 as next targets. The ascending 50-day moving average suggests that the stock still has potential for a rise."






The picture facing the Royal Bank Of Scotland Group is decidedly less certain. Trading Central say they prefer an extension of recent losses with a target at 318.75 should the pivot point at 377.75 hold.

We caution that this call comes despite a mixed set of indicators: "The RSI is below 50. The MACD is below its signal line and positive. The MACD must penetrate its zero line to expect further downside. Moreover, the stock is below its 20 day MA (352.65) but above its 50 day MA (321.63)."

Randgold Resources offers "sustainable attractive free cash generation"

Buy Randgold Resources says Kate Craig at Liberum Capital in response to yesterday's FY 2012 results release.

The call comes as investors buy into the stock as Randgold revealed sales and EPS which came inline with consensus. A dividend increase of 25% y/y has also whetted appetite.  

Craig says:

"2012 production overall broadly in line with our numbers, EPS of US$4.70/sh was an 8% beat. Cash costs were up at both Loulo and Tongon due to issues with recoveries which we expect will run into Q1 this year. Kibali capex overrun was only 6 pct which is better than our estimation of 10 pct, but still believe this can further increase on execution.

"We believe the company's Tier 1 long life assets and impressive operational management team will deliver sustainable attractive free cash generation returning +40% of its market cap over the next 5 years. There is potential for continued weakness in recoveries at Tongon and Loulo in the first half, but we remain positive on a 12 month view trading on 10.4x 2014 pER and 6.0x EV/EBITDA."

Barclays sets yet more cash aside for PPI mis-selling

Barclays has increased the provisions to cover two mis-selling scandals by another £1bn.

It relates to the mis-selling of interest rate hedging products sold to small firms, and payment protection insurance (PPI) schemes.

Following a review, the bank said total provisions for the scandal involving interest rate swaps were now £850m, and £2.6bn for the PPI schemes.

The figure comes ahead of the bank's full-year results due on 12 February.

Tags: Royal Bank of Scotland Group plc (LON:RBS) + Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) + Barclays PLC (LON:BARC) + Barclays PLC (ADR) (NYSE:BCS)

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