E*TRADE To BlackRock: Here Are Barclays' New Favorite Financials
Barclays recently initiated coverage on more than a dozen financial sector stocks. The firm was mostly bullish on the space, with a handful of exceptions. Here’s a breakdown of what Barclays had to say.
Brokers, Asset Managers And Exchanges
Analyst Jeremy Campbell has a Neutral overall rating on brokers, asset managers and exchanges stocks. Campbell is calling for little change in the industry over the next year, anticipating solid market returns, growth in volume and higher interest rates.
Campbell named Charles Schwab Corp (NYSE: SCHW) as the best overall online broker stock, while E*TRADE Financial Corp (NASDAQ: ETFC)’s future will hinge on mergers and acquisitions.
Overall, Barclays is negative on asset managers, but Campbell said BlackRock, Inc. (NYSE: BLK) and Invesco Ltd. (NYSE: IVZ) are exceptions.
Related Link: Washington News Overrides Q2 Big Bank Earnings Reports
Consumer Finance
In the consumer finance space, analyst Mark DeVries said business development companies delivered mostly in-line numbers in the second quarter, but management commentary tended to be cautious. DeVries expects the environment to remain challenging, but noted that higher interest rates could help. Overall, Barclays maintains an Equal Weight rating on BDCs. DeVries said the highest-quality names are already trading at a valuation premium to their peers, leaving little room for upside. He mentioned Ares Capital Corporation (NASDAQ: ARCC) as one high-quality exception that trades at a price-to-book ratio of only about 1.0.
Initiations
In the note, Barclays initiated coverage on and set new price targets for 13 financial stocks:
BlackRock: Overweight rating, $475 price target
CBOE Holdings, Inc (NASDAQ: CBOE): Equal-Weight rating, $105 price target
CME Group Inc (NASDAQ: CME): Overweight rating, $139 price target
E*TRADE: Overweight rating, $45 price target
Financial Engines Inc (NASDAQ: FNGN): Overweight rating, $38 price target
Franklin Resources, Inc. (NYSE: BEN): Underweight rating, $40 price target
Intercontinental Exchange Inc (NYSE: ICE): Overweight rating, $72 price target
Invesco: Overweight rating, $38 price target
Legg Mason Inc (NYSE: LM): Equal-Weight rating, $39 price target
Nasdaq Inc (NASDAQ: NDAQ): Overweight rating, $85 price target
T. Rowe Price Group Inc (NASDAQ: TROW): Overweight rating, $85 price target
Charles Schwab: Overweight rating, $48 price target
Virtus Investment Partners Inc (NASDAQ: VRTS): Equal-Weight Rating, $113 price target
Related Link: Yellen Puts A Crimp In Financial Rally
Latest Ratings for ETFC
Sep 2017 | Barclays | Initiates Coverage On | Overweight | |
Jul 2017 | Morgan Stanley | Maintains | Equal-Weight | |
Jul 2017 | Bank of America | Maintains | Neutral |
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