Banking group Royal Bank of Scotland (RBS) is forecast for positive share price momentum, following upgraded buy ratings from several analyst firms.
Equity analysts at Morgan Stanley have raised their target price from 315 GBX to 335 GBX while Citi Group changed its recommendation from ‘hold’ to ‘buy’ last week
Berenberg Bank meanwhile was more bulish, restating its buy rating for RBS in a research note published on Thursday and setting its target price at 340 GBX.
First dividend in 10 years
RBS recently announced it is on course to pay its first dividend in 10 years, singalling that its financial position is strengthening.
Management plans to pay 2 pence a share as an interim dividend once it completes its US$4.9 billion settlement with the US Department of Justice over mortgage-backed securities.
RBS had already put aside money to cover the cost of the settlement with US regulators, which was agreed in May. RBS banked lower profits for the January-to-June period than in 2017 due to provisions for the settlement, leading to attributable profit of £888 million, compared with £939 million in 2017.
RBS chief executive Ross McEwan said “We still have a lot more to do to achieve our ambition of being the best bank for customers in the UK and Republic of Ireland. However, with our major legacy issues largely behind us, we are able to fully focus on closing this gap.”
RBS was bailed out by the government at the height of the financial crisis and is still about 62% publicly owned.