Barclays Q2 earnings preview: Where next for BARC stock?

When will Barclays report Q2 earnings?

Barclays is due to report Q2 earnings ahead of the open on Thursday 28^th July.

What to expect?

Barclays will report as the are price underperforms sector peers, down some 29% so far this year. Watch for an 11.3% rise in revenue and a 16.8% fall in pre-tax profit to £4.1 billion.

Further fallout from US blunder

In Q1 Barclays reported a 10% rise in total revenue to £6.5 billion, which went some way to offset higher costs which rose 15% to £4.1 billion. £540 million of those additional costs were set aside to cover a trading breach in the quarter whereby Barclays, in a paperwork blunder sold more structured and exchange-traded notes in the US than it registered.

Barclays announced earlier this week that it will buy back as much as $18.6 billion of the securities in a process starting at the beginning of August and which should determine its losses from the error. There is a good chance that further costs relating to this error will be booked in the Q2 results.

Higher NII

In the second quarter results, Barclays is expected to benefit from rising interest rates in both the US and the UK, which will lift net interest income. The BoE has hiked rates at all its monetary policy meetings this year and the Federal Reserve has lifted rates by 150 basis points. However, there is a good chance that this is already priced in.

Trading operations could be another positive point for the bank. Like its US counterpart Goldman Sachs, Barclays could also see significantly higher trading revenue.

Investment banking & loan growth weakness

However, like its US counterparts, investment banking revenue could weaken as the IPO market dries up and as deal-making volume has fallen steeply over the past few months.

Consumer spending has slowed as the cost-of-living crisis ramped up and loan growth is also likely to slow given rising interest rates and falling confidence.

Where next for Barclays share price?

Barclays trades down 19% so far this year, falling from 215p in early January to current levels of 160p. The prices is extending a rebound from 145p the July low, retaking the 50 amd 100 sma whilst also rising above the falling trendline, which with the bullish RSI keeps investors hopeful of further upside.

A breakout above 162p the late June high could open the door to 173p the May high.

On the flip side, failure to hold above the 50 & 100 sma at 156p could see the share price head towards 145p. A break below here is needed to create a lower low.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.