Citi stays 'overweight' European banks; HSBC, Intesa and NatWest 'top picks'
Citi highlighted HSBC, Intesa and NatWest as its top picks in the banking sector on Friday as it maintained its ‘overweight’ rating on European banks.
Source: Sharecast
"Valuations are starting to look more stretched versus history but still look cheap versus other sectors and an all-in capital return yield of circa 8% is still highly attractive," the bank said.
It said relative earnings momentum is particularly healthy, with 8% consensus earnings per share upgrades year-to-date, driven by non-NII & costs, whereas other European sectors are still suffering downgrades.
"While this divergence continues, we expect sector rotation to persist," it said.
Naming its top picks, Citi said it prefer to own names that are "yet to re-rate as sharply as peers, and offer EPS upgrade potential and attractive yields".
For its least preferred stocks - Deutsche Bank, SHB and UBS - Citi said it had focused on names that have re-rated too quickly, or have weaker EPS momentum and where it sees future downside risk to consensus EPS estimates.
If you're looking to grow your money over the longer term (5+ years), we have a range of investment choices to help.
Lloyds Bank is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.
Important legal information
Lloyds and Lloyds Bank are trading names of Halifax Share Dealing Limited. The Lloyds Bank Direct Investments Service is operated by Halifax Share Dealing Limited. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Registered in England and Wales no. 3195646. Halifax Share Dealing Limited is authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.
The information contained within this website is provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd unless otherwise stated. The information is not intended to be advice or a recommendation to buy, sell or hold any of the shares, companies or investment vehicles mentioned, nor is it information meant to be a research recommendation. This is a solution powered by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd incorporating their prices, data news, charts, fundamentals and investor tools on this site. Terms and conditions apply. Prices and trades are provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd and are delayed by at least 15 minutes.
Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.
