Royal Bank of Scotland (RBS)

RBS remains a taxpayer-owned bank (73%) still restructuring to simplify itself amid a shift to a more UK-focused operation following recklessly acquisitive growth that resulted in it becoming too big to fail. 2017 saw it make its first annual profit, although it did make a loss in the final quarter. Will things have improved in Q1? Unlike Barclays, settlement with the US DoJ still eludes it. In fact, news on this, or further government stake sales (at a loss), could be the catalyst for shares to breakout from their current sideways channel.

RBS fell steadily from Jan highs, much like Lloyds and HSBC, but are now well off their lows, currently testing a resistance level which, if overcome, could open the door to a 14% rally back towards 2018 highs. Note that the most bearish broker target is only 4.5% below the current share price,

Will RBS break out to Jan highs of 305p (+14%) or retreat to March lows of 252p (-5.6%)?

• Shares consolidating after sharp Q1 decline
• Potential for bullish inverse Head and Shoulder reversal to 280p.
• Brokers positive on RBS (90% Buy/Hold), with 90% forecasting a 12-month share price rise
• 8% average results day trading range since 2012 (6.1% for Q1 updates).
• In the 10-day run-up to the Q1 update last April, RBS shares rallied 10.9%

Broker Consensus: 42% Buy, 50% Hold, 8% Sell

Bullish: Santander, Outperform, Target 345p, +29% (2 Oct 17)

Average Target: 290p, +9% (13 Apr 18)

Bearish: SocGen, Sell, Target 255p, -4.5% (14 Mar 18)

Pricing data sourced from Bloomberg on 13 April 2018. Please contact us for a full, up to date rundown.