It’s always worth keeping an eye on the earnings forecasts for your favourite companies, especially if you use forward P/E ratios to gauge when to buy and sell your shares.
You never know, if City brokers have been revising their projections of late, your investments may not be as cheap — or expensive — as you think!
Today I’m looking at the earnings per share (EPS) forecasts for Barclays (LSE: BARC) (NYSE: BCS.US), the FTSE 100 bank. All my figures are courtesy of S&P Capital IQ.
The consensus for 2013 is for underlying EPS of 26p, which puts the 289p shares on an undemanding forward P/E of 11.
Currently, City analyst estimates suggest earnings may grow 12.5% 2014 and another 19% in 2015. If these forecasts prove correct, the current share price would prove attractive.
All told, the forecasts seem optimistic, with pre-exceptional earnings essentially predicted to grow nicely between now and 2015 although the near-term P/E of 11 looks like the market has its doubts that things will progress as these predictions suggest.
Whether these projections make Barclays a buy, a hold or a sell is, of course, up to you. To put the company’s multiple into perspective, the FTSE 100 at 6,468 trades on a P/E of 14.8.
If you already own Barclays or these forecasts have dampened your mood on the company why not check out this exclusive report which highlights 8 companies held by one of the UK’s greatest investors.
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> Nate does not own any share mentioned in this article.
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