Deutsche Bank lifts target price for Barclays ahead of quarterly results

Analysts at Deutsche Bank lifted their target price on shares of Barclays ahead of the lender´s third quarter figures due out on 27 October.

The broker´s analysts, David Lock and Kinner Lakhani, forecast the London-based investment bank would post profits before tax of £1,857m for the three-month period, alongside a common equity Tier 1 capital ratio of 11.6%.

Expectations for revenues at its investment banking arm were high, following the strong performance put in by its US peers on the Fixed Income, Commodities and Currencies side of things.

The 18% year-on-year appreciation in the US dollar was also expected to act as a tailwind.

Aside from the above, focus would also be on the outlook for margins in its UK business in 2017, its non-core activities and an additional £500m charge related to the payment protection insurance scandal.

Nevertheless, on the back of the back of FX and the outlook for its commercial and investment banking revenues Deutsche bank lifted its forecasts for the period running between 2016-2018 and lifted its target price from 176p to 184p.

Lock and Lakhani reiterated their recommendation to 'hold'.

As regards potential charges for conduct and PPI issues, the analysts had penciled in a further £0.5bn for the third quarter but nothing thereafter.

For other litigation issues, predominantly US RMBS, they assumed Barclays would take another £0.5bn charge in the last quarter of 2016, but said that timing and quantum might differ.

Every additional £0.5bn charge detracted 15 basis points from the lender´s common equity Tier 1 ratio, they estimated.