Buybacks are the best avenue for Barclays Plc to boost its flagging share price, according to Jefferies analysts.
(Bloomberg) — Buybacks are the best avenue for Barclays Plc to boost its flagging share price, according to Jefferies analysts.
With the UK bank said to be hiring Boston Consulting Group for a strategy review to address longstanding weakness in its shares, Jefferies predicted that Barclays will return almost £10 billion ($12.8 billion) to investors via dividends and stock repurchases through fiscal 2025.
Analyst Joseph Dickerson and colleagues lifted their buyback estimates to £2.2 billion for both fiscal 2024 and 2025, saying that’s more than 60% above analyst consensus. They’re already predicting a £1.5 billion payout this year.
“Forget strategy review, what about some buybacks?,” they wrote. “Barclays management seem compelled to want to address weakness in the share price. The best way to do that is through large-scale buybacks executed below book value.”
Read: Barclays CEO Offers More Bullish Outlook, Seeks to Grow M&A
Jefferies lifted its price target on the stock to 320 pence from 300 pence previously, suggesting it could more than double in value from a current level of about 155 pence.
Barclays has underperformed peers over the past year in part due to disappointment over shareholder returns as well as lackluster net interest margin gains despite jumbo rate hikes from the Bank of England.
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