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- Bank of America Securities downgraded Barclays (NYSE:BCS) to Underperform from Neutral after potentially significant restructuring charges added uncertainty to the bank’s strategy and financial targets.
- “This could improve longer-term profitability but seems unlikely to address the core issue of ~70% of capital tied up in the lower-returning Corporate & Investment Bank, which the market perceives as volatile,” analyst Rohith Chandra-Rajan wrote in a note to clients.
- The BofA analyst sees near-term risks to capital distributions and uncertain profitability benefits from the restructuring, which haven’t been outlined.
- The lack of details keeps Chandra-Rajan skeptical. “The potential restructuring charge was described as reducing structural costs but was also referred to as a growth driver. At present, this looks like a list of investor concerns, rather than a focused strategy,” he said.
- The Underperform rating contrasts with the SA Quant rating of Hold and the average Wall Street rating of Buy.
- Barclays (BCS) stock gained 2.0% on Thursday morning trading after the stock dropped 7.3% in the last two sessions.
