Proactive Investors - Citi analysts have highlighted Barclays PLC (LON:BARC) and the London Stock Exchange Group PLC (LON:LSEG) as top picks in the investment banking and exchanges sectors, respectively, in preparation for the third-quarter earnings season.
Citi noted generally bullish third-quarter trading trends, with analysts stating: “The third quarter saw healthy capital markets volumes, buoyed by a number of events including shifting expectations on timing and magnitude of Fed cuts, the (Bank of Japan) pivot and on China stimulus package.
“Equities was particularly strong, and Primary revenues also continue to recover, led by higher (debt capital markets).”
Barclays stood out for its resilient asset quality in the UK, coupled with a solid capital position and manageable impairments, said Citi.
Despite some concerns surrounding its US consumer business, where FX translation and potential partnership changes could weigh on performance, Barclays' overall results are expected to be in line with consensus.
In contrast, Citi expects Deutsche Bank (ETR:DBKGn) and UBS to underperform.
On the exchanges front, Citi sees LSEG’s earnings to hit consensus estimates, with strong Tradeweb volumes expected to be a highlight.
Tradeweb is the OTC electronic marketplace part owned by LSEG.
Germany’s capital markets flagship Deutsche Börse (ETR:DB1) Group, on the other hand, faces a “tougher 2025 ahead” as current volumes begin to subside.
Barclays and LSEG both have their third-quarter results out this Thursday, 24 October.