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Barclays Looking to Move Higher Ahead of Third Quarter Earnings

Barclays share price is moving higher with a gain of 1.25% on Tuesday as the company gets set to announce its third quarter results on Friday. The stock is down 40% on the year as the virus eats into business activity and loans.

Consensus estimates for the third quarter are for £4.84 billion in revenues and earnings per share of 1.2p. Results for the second quarter of 2020 saw income at £5.3 billion with EPS of 0.5p so the market will be focused on whether the company can produce the higher per share earnings against revenues that are £450 million lower.

The key to the earnings will be the consensus expectation for a drop in impairment charges from £1.6 billion in Q2 to £1 billion in Q3. Costs are expected to remain around the £3.3 billion level.  

Analysts are looking for a reduction in loan loss provisions across the banking sector in this upcoming earnings season as banks try to maintain a fragile recovery. The recent surge in virus cases is not helpful for the following quarter and the full-year figures as more businesses are shut down or seeing restricted opening hours. U.S. banks led the way for their European counterparts and after loan book provisions of $15bn and $18bn for the first two quarters, JP Morgan and Citigroup set aside only $2.9bn between them so this gives hope for solid numbers from the likes of Barclays.

Barclays Technical Outlook

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Barclays share price has recovered from the September lows to test 108.00p and this will be the target ahead of earnings. Above there we have strong resistance at the August highs, which also align with the previous uptrend support. Price is looking to close above the 50-day moving average and this would be a positive for the week ahead. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.   

Barclays Daily Chart

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