This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Higher bond yields are good for banks, as are rising interest rates. A UK interest rate hike by the Bank of England (BoE) could help the shares on 2 Aug. Broker Berenberg (23 Jul) says RBS offers better value that Lloyds. Broker Barclays (20 Jul) stays overweight RBS into earnings seaso based on discount to Europe peers.
Risks to RBS shares: the UK government still selling down its bailout stake; disappointing Q2 results/outlook from it or from peers in early August; still restructuring following the financial crisis; the BoE deciding not to hike rates on 2 Aug. Dividend payments have yet to resume.
Consensus is Bullish with 44% of brokers saying Buy and only 4% Sell, supported by 95% of target prices suggesting upside from current levels to an average valuation of 311p, which is above our target of revisiting the 9.5yr falling highs resistance.
Next Event: H1 Results, 3 Aug
Latest Broker 12-Month Consensus: 44% Buy, 52% Hold, 4% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 2.2 | -4.8 | -9.8 | -15.9 | 1.0 | 31.5 | -29.5 | -23.1 | -25.8 |
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Prepared by Michael van Dulken, Head of Research