Is Jes Staley really worth $21 billion to Barclays shareholders?
That's the additional market value analysts who track the British bank's shares expect him to create over the next 12 months.
At 55 percent, the gap between the lender's current share price and the level most analysts expect to hit in a year's time is the biggest of all European banks, according to Bloomberg Intelligence. Goldman Sachs goes even further: analysts there think Barclays's stock may almost double in the next year.
Just one of the 28 analysts tracked by Bloomberg rates Barclays a sell. Take a bow, Tom Rayner of Exane BNP Paribas. He has recommended investors sell the stock since September. He's also reduced his target price to 180 pence from 290 pence in August.
In reality, Barclays's shares haven't posted a 63 percent annual gain since 2009. Before then, they only gained that amount twice in the previous two decades.
It's easy to take a shot at the failed predictions of sell-side analysts. Barclays shareholders have lost 33 percent of their money in the past six months, more than the industry's average 24 percent loss.
But why are they so optimistic?
Firstly, the stock is cheap. The lender trades at a 50 percent discount to tangible book value, a steeper discount than the industry's 20 percent average. The stock trades at about 7.4 times estimated earnings -- the only banks to trade at a lower multiple are Commerzbank, Credit Agricole and BNP Paribas, according to Bloomberg Intelligence.
But there's a path out of the wilderness and a leader to take the bank there. The arrival of new blood at the top of a company in difficulty always stirs the imagination and Staley, installed in December after Antony Jenkins's ouster, is no exception.
The JPMorgan Chase veteran has pledged to keep shrinking Barclays' under-performing investment bank; Chairman John McFarlane has also promised to revive returns.
This is all encouraging for analysts. They're speculating Staley will cut or sell its African business, shrink the U.S. cards business, prune consumer branches and pare back its investment bank to unlock value.
Unlike Deutsche Bank, Barclays has a consumer bank to fall back on as investment banking loses its allure. That lack of options helps to explain why the German lender is the second least-loved European bank, based on analysts' ratings.
But costs remain high and it's still not clear how Barclays's investment bank can return to profitable growth.
So far, McFarlane and Staley have won over the analyst community, but their room for maneuver is shrinking. Market turmoil has roiled stocks and made plans to cut assets and sell businesses that looked achievable last year look ambitious in 2016.
As the bank prepares to report results on Tuesday, there is scope for disappointment if they can't soon show they've made progress in rebuilding the business.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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