Mindful Money’s weekly share watch: Barclays, ITV & AstraZeneca

28th July 2014


With Barclays again in the spotlight, this time as a result of the lawsuit brought by the New York attorney general, shareholders will be keen to hear how the bank is progressing when it updates the market on Wednesday.

In June the bank was accused of allegedly misleading investors into so-called ‘dark-pool’ investing, a claim it strongly denies and is looking to have thrown out of court.

Share prices in the banking sector have been generally under pressure this year and Barclays has been no exception, where over the past 12 months its stock is down by 27%. However the fall is apparently being viewed as a opportunity, with the current broker consensus pointing towards a ‘buy’, as analysts at Nomura, Deutsche and UBS have all reiterated positive recommendations on the firm.

In its second quarter update this week Sheridan Admans, investment research manager at The Share Centre says the market will be concentrating on the performance of Barclays Capital. Admans, who for his part is calling the bank a ‘hold’ says: “Investors could see further updates on its recently announced strategic review, alongside updates on regulatory issues and the resulting possible lawsuits. The market will also be focusing on the group’s outlook.”

Wednesday also sees broadcaster ITV reports its half year results. While its first quarter update was seen as somewhat disappointing, its shares are still up 30% over the past year, and second quarter advertising revenues are expected to be supported by the recent World Cup.

Looking ahead at what investors should expect this week, Keith Bowman, equity analyst, Hargreaves Lansdown Stockbrokers says the contribution from recent acquisitions and ongoing targeted cost savings may feature, while its management’s broader strategy to grow and rebalance the business in the UK and internationally might once more be underlined. He adds: “Pre-tax profit for the first half is forecast to grow by 14% to £308m, with consensus analyst opinion for a ‘buy’ recently buoyed by increased takeover speculation following the sale of a 6.4% share stake by BSkyB to Liberty Global – owner of Virgin Media.”

AstraZeneca delivers its second quarter update on Thursday and following its rejection of Pfizer’s much documented takeover bid earlier this year, investors will want some convincing that Astra made the right call and can go it alone in developing its research & development (R&D) assets. The past 12 months has witnessed its stock firm by 34%, chiefly on the back of the excitement surrounding the potential merger but Admans, who rates the firm a ‘hold’, in line with the general consensus believes investors are likely to see generic competition continue to hurt the group’s revenue and profitability. “Updates on the progress of R&D projects will be sought after, as will the progress of its cost cutting programme,” he adds.

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