Broker tips: Barclays, Hochschild

Analysts at Deutsche Bank raised their target price on Barclays from 180.0p to 200.0p on Friday, stating that the lower UK income outlined by the bank recently "should have been expected".

Barclays said it was "not surprised" by Barclay's guidance for significant net interest margin reduction in the UK given the first-quarter lockdown and stated in fact, guidance for a roughly 240 basis point net interest margin was actually "slightly better" than its original 235bps expectation.

The German bank increased its revenue estimates for Barclay's by roughly 1%, primarily due to "a strong start to the year" in investment banking, which increased its pre-provision profit forecast by 2-4%.

"Our 2022/23 EPS estimates increase by 6% reflecting the additional benefit of buying back more shares below book value than we previously expected," added Deutsche's analysts, who also stood by their 'buy' rating non the stock.

Analysts at Berenberg reiterated their 'hold' rating on precious metals group Hochschild Mining on Friday, labelling the company's 2020 performance a "miss".

Berenberg said Hochschild, which has a portfolio of three operating mines in South America producing roughly 38.0m ounces of silver equivalent every year, was presently experiencing a slightly lower level of production at the sites due to Covid-19 volatility.

The German bank also stated it believes a medium-term grade decline was on the horizon at Hochschild's key mine, Inmaculada, something it said was not currently priced into expectations.

"We think this will result in lower FCF generation and, potentially, depending on the severity of the grade decline, push the company into an M&A transaction to fill the gap of falling grades with another asset," said Berenberg.

"We believe that the current valuation prices in a more-than-optimistic case in terms of mine lives, grade and commodity prices," concluded the analysts, who also reiterated their 230.0p price target on the stock.