Barclays share price is down by almost 2% as investors react to the mixed company’s earnings. The shares are trading at 109p, which is the lowest they have been since May 26. Also, Barclays is among the worst-performing stocks in the FTSE 100. Lloyds share price, too, has dropped by more than 1.50% ahead of its earnings. NatWest shares are down by 0.30% while HSBC have gained by 0.80%.
Barclays earnings review
In a statement earlier today, Barclays said that it made £11.6 billion in the first half of the year, which was higher than the £10.7 billion it made a year ago. The company made a net income of £695 million in this period.
This income declined mostly because the bank allocated more than £1.6 billion to bad loans provisions. As a result, the bank has allocated more than £3.7 billion in provisions in the first half of the year. That is the biggest provision the bank has put in place in more than a decade.
However, the credit losses was offset by a 49% increase in trading income. Fixed income rose by 60%, which was slightly below that of Goldman Sachs, JP Morgan, and Morgan Stanley. Equity trading rose by about 30%. In a statement, the bank’s CEO said:
“The reason that we have been able to support the economy as extensively as we have and remain financially resilient is because of our diversified universal banking model. Even after impairment, we remain profitable.”
So, is Barclays share price a buy?
Barclays share price has had a difficult time in the past decade. The shares have dropped by more than 50% in the past five years. Year to date, they have dropped by more than 40%. This performance is slightly better than that of rivals like Lloyds Bank and RBS (NatWest) because Barclays is relatively diverse. However, the performance is below that of its giant American rivals like JP Morgan and Goldman Sachs.
Analysts believe that Barclays share price is a good buy at the current level. In a recent note, analysts at Jefferies and UBS reiterated their buy rating for the stock. Similarly, those at Morgan Stanley, Goldman Sachs, Credit Suisse, and Citigroup see the stock rising. These banks expect that Barclays share price will climb to between 120p and 135p. The most optimistic analyst is from Berenberg, who see the shares rising to 160p.
Barclays stock price technical forecast
The daily chart shows that Barclays share price has been in a downward trend in the past few days. The stock is below the 50-day and 100-day exponential moving averages and between the 23.6% and 38.2% Fibonacci retracement level.
The price is also below the ascending trend line that is shown in pink below. Therefore, it seems like bears are in control now, which means that the stock will continue to drop as they target the 23.6% retracement at 102p.
On the other hand, a move above the psychological and 100-day EMA level at 120p will invalidate this trend.