Goldman Sachs is out with its near-term forex outlook
Investing.com -- Deutsche Bank (ETR:DBKGn) has raised its target prices on several major U.K. banks, citing stronger-than-expected revenue and earnings growth across the sector.
The bank also upgraded Paragon Banking Group Plc to a “buy” from “hold” and highlighted OneSavings Bank as a potential acquisition target.
In a recent note, Deutsche Bank analysts said U.K. banks are forecast to post the highest revenue growth in Europe over the next three years.
In some instances, earnings per share growth is expected to be twice as high as that of the next-best performing European lender.
Despite the strong growth outlook, U.K. banks continue to trade at a discount compared to European peers, according to the brokerage.
The brokerage said the three-year outlook is “very favourable” and added that acquisitions in the sector are both likely and could add value.
The analyst lifted its price target on Barclays (LON:BARC) to 380p from 370p and maintained a “buy” rating. Lloyds Banking Group (LON:LLOY) also retained its “buy” rating, with the price target increased to 90p from 88p. Standard Chartered (LON:STAN) was kept at “hold,” but the target was raised to 1,200p from 970p.
Paragon Banking Group Plc was upgraded to “buy” with a new target of 1,050p, up from 890p.
Deutsche Bank said the lender is no longer trading at a premium, despite what it described as strong underlying performance.
“Our preference is for the superior and more predictable capital generation of Lloyds and Natwest (LON:NWG),” the brokerage said.
“At the smaller end we see OneSavings Bank as an attractive acquisition target,” they added.