London Markets Archives | Email alerts

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

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

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    U.K. 10 Year Gilt (TMBMKGB-10Y)
  • X
    U.S. 10 Year Treasury Note (TMUBMUSD10Y)
  • X
    Germany 10 Year Government Bond (TMBMKDE-10Y)

or Cancel Already have a watchlist? Log In

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 +0.23% has outgained U.S. /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.47% and European /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y +0.96% 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 -0.68% , Barclays /zigman2/quotes/208409333/delayed UK:BARC -0.55% , NatWest /zigman2/quotes/209265718/delayed UK:NWG -0.55% and Standard Chartered /zigman2/quotes/200125072/delayed UK:STAN -1.73% .

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.17% on Friday drifted 0.6% lower to 7,044.68. Lloyds /zigman2/quotes/202285510/delayed UK:LLOY -1.07% paced the decline, with the U.K. focused bank losing 3%.

Pub chain J.D. Wetherspoon /zigman2/quotes/209658419/delayed UK:JDW -1.25% 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
3.13
+0.0073 +0.23%
Volume: 0.00
Nov. 28, 2022 5:02p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
3.71
+0.02 +0.47%
Volume: 0.00
Nov. 28, 2022 12:39p
loading...
/zigman2/quotes/211347112/realtime
add Add to watchlist BX:TMBMKDE-10Y
BX : Tullett Prebon
2.00
+0.02 +0.96%
Volume: 0.00
Nov. 28, 2022 6:04p
loading...
/zigman2/quotes/203901799/delayed
UK : U.K.: London
488.60 p
-3.35 -0.68%
Volume: 11.97M
Nov. 28, 2022 4:35p
P/E Ratio
10.42
Dividend Yield
4.57%
Market Cap
£98.23 billion
Rev. per Employee
£246,020
loading...
/zigman2/quotes/208409333/delayed
UK : U.K.: London
158.18 p
-0.88 -0.55%
Volume: 23.05M
Nov. 28, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
3.95%
Market Cap
£25.22 billion
Rev. per Employee
£297,978
loading...
/zigman2/quotes/209265718/delayed
UK : U.K.: London
£ 254.60
-1.40 -0.55%
Volume: 9.06M
Nov. 28, 2022 4:35p
P/E Ratio
10.32
Dividend Yield
0.05%
Market Cap
£24.70 billion
Rev. per Employee
£258,720
loading...
/zigman2/quotes/200125072/delayed
UK : U.K.: London
579.80 p
-10.20 -1.73%
Volume: 4.01M
Nov. 28, 2022 4:35p
P/E Ratio
8.12
Dividend Yield
1.82%
Market Cap
£17.06 billion
Rev. per Employee
£209,170
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,474.02
-12.65 -0.17%
Volume: 480,435
Nov. 28, 2022 4:59p
loading...
/zigman2/quotes/202285510/delayed
UK : U.K.: London
45.82 p
-0.50 -1.07%
Volume: 69.83M
Nov. 28, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
4.65%
Market Cap
£30.89 billion
Rev. per Employee
£296,213
loading...
/zigman2/quotes/209658419/delayed
UK : U.K.: London
457.20 p
-5.80 -1.25%
Volume: 148,398
Nov. 28, 2022 4:35p
P/E Ratio
30.10
Dividend Yield
0.00%
Market Cap
£587.59 million
Rev. per Employee
£41,315
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.