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Oct. 1, 2021, 9:19 a.m. EDT

Goldman Sachs says the average upside for these U.K. banks is 52%

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By Steve Goldstein

Goldman’s strategists say banks and value in general have room to catch up.

With the recent surge in bond yields, so too come analysts hopping on the value stock bandwagon.

As Goldman Sachs’ economists now think rate hikes in the U.K. will start in May 2022 — ahead of the U.S. and the eurozone — bonds yields should continue to rise. Already, the U.K. 10-year /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y -7.47% has outgained U.S. /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +1.16% and European /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y -13.89% rivals, with an 80 basis point rise this year.

Goldman’s strategists say banks and value in general have room to catch up. Banks trade at a 35% discount to the market, as well as a discount to their own historical valuations, and it says the average upside is 52% for the U.K. banks it rates as buy: HSBC /zigman2/quotes/203901799/delayed UK:HSBA -0.18% , Barclays /zigman2/quotes/208409333/delayed UK:BARC -1.22% , NatWest /zigman2/quotes/209265718/delayed UK:NWG -1.08% and Standard Chartered /zigman2/quotes/200125072/delayed UK:STAN -0.72% .

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.24% on Friday drifted 0.6% lower to 7,044.68. Lloyds /zigman2/quotes/202285510/delayed UK:LLOY -0.94% paced the decline, with the U.K. focused bank losing 3%.

Pub chain J.D. Wetherspoon /zigman2/quotes/209658419/delayed UK:JDW -1.18% was the highest profile company reporting results, as it lost £154.7 million before tax in the July 25-ending year, before exceptional items, as like-for-like sales tumbled 38%. It said it was hard to find staff in the “staycation” areas in the West Country and elsewhere. Wetherspoon shares edged up 0.7%, to trim this year’s losses to 6%.

/zigman2/quotes/211347177/realtime
add Add to watchlist BX:TMBMKGB-10Y
BX : Tullett Prebon
0.72
-0.06 -7.47%
Volume: 0.00
Dec. 9, 2021 12:44p
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/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
1.50
+0.02 +1.16%
Volume: 0.00
Dec. 9, 2021 7:45a
loading...
/zigman2/quotes/211347112/realtime
add Add to watchlist BX:TMBMKDE-10Y
BX : Tullett Prebon
-0.35
-0.04 -13.89%
Volume: 0.00
Dec. 9, 2021 1:45p
loading...
/zigman2/quotes/203901799/delayed
UK : U.K.: London
439.50 p
-0.80 -0.18%
Volume: 4.88M
Dec. 9, 2021 12:30p
P/E Ratio
10.94
Dividend Yield
3.78%
Market Cap
£90.20 billion
Rev. per Employee
£257,711
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/zigman2/quotes/208409333/delayed
UK : U.K.: London
183.64 p
-2.26 -1.22%
Volume: 8.33M
Dec. 9, 2021 12:30p
P/E Ratio
N/A
Dividend Yield
1.63%
Market Cap
£31.24 billion
Rev. per Employee
£332,602
loading...
/zigman2/quotes/209265718/delayed
UK : U.K.: London
£ 219.20
-2.40 -1.08%
Volume: 4.14M
Dec. 9, 2021 12:30p
P/E Ratio
10.75
Dividend Yield
0.03%
Market Cap
£25.05 billion
Rev. per Employee
£237,730
loading...
/zigman2/quotes/200125072/delayed
UK : U.K.: London
430.20 p
-3.10 -0.72%
Volume: 778,935
Dec. 9, 2021 12:30p
P/E Ratio
15.93
Dividend Yield
2.02%
Market Cap
£13.51 billion
Rev. per Employee
£194,812
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,319.46
-17.59 -0.24%
Volume: 148,033
Dec. 9, 2021 12:30p
loading...
/zigman2/quotes/202285510/delayed
UK : U.K.: London
46.92 p
-0.45 -0.94%
Volume: 26.05M
Dec. 9, 2021 12:29p
P/E Ratio
7.13
Dividend Yield
2.64%
Market Cap
£33.71 billion
Rev. per Employee
£554,080
loading...
/zigman2/quotes/209658419/delayed
UK : U.K.: London
880.50 p
-10.50 -1.18%
Volume: 50,125
Dec. 9, 2021 12:30p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£1.15 billion
Rev. per Employee
£19,796
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