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

Details

Category: Share Price Drivers

Published on Tuesday, 05 February 2013 11:15

Written by Will Peters

Stock in Focus: 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)

Article Brief: Where to next for shares in RBS and Barclays? We look to the short-term indicators for guidance.

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."

Latest news items: HSBC Holdings plc: HSBA shares hit lower as investors persist with a now 6 pct correction from 4.5 year highs - 24/05/2013 11:43 EMED Mining Public Limited and Chariot Oil & Gas Limited: Two stocks forecasted to head in opposite directions - 24/05/2013 11:39 Outlook for Sirius Minerals PLC and XCITE ENERGY LIMITED suggest short-term price action will be biased to the downside - 24/05/2013 11:34 Outlook for Gulfsands Petroleum plc (GPX): Shares tipped to head lower towards 80.5 ahead of rebound - 23/05/2013 11:41 Australian dollar and New Zealand dollar on the back-foot against the British pound sterling - 23/05/2013 09:48

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)