On Sep 9, the Zacks Investment Research upgraded London-based Barclays PLC BCS to a Zacks Rank #1 (Strong Buy).

Upgrade Driver: Streamlining Initiatives

Over the past few years, Barclays has been undertaking various restructuring initiatives with a view to reduce its operating expenses. These initiatives have started bearing results as evident from the persistent fall in the company’s operating expenses.

To be in line with its plans, Barclays intends to exit Africa, having already sold roughly 12.2% of its stake in May 2016. As the company is accelerating its restructuring activities in its Non-core division, the restructuring costs in this division are expected to increase in 2016. Nonetheless, all these strategies will improve the company’s profitability further, going forward.

Over the past couple of months, Barclays has completed the sale of its Italian retail banking network and Barclays Risk Analytics and Index Solutions Ltd. (“BRAIS”), both of which were announced earlier in Dec 2015. Hence, as a result of these initiatives, the Barclays stock price rose 25% over the past two months.

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Driven by its restructuring plans, the management reiterated its operating expenses (excluding conduct and litigation and other notable items) target for the Core division at £12.8 billion for 2016. Further, the company expects non-core operating expenses to be £400–£500 million in 2017.

Notably, the Zacks Consensus Estimate has remained constant at 62 cents and 83 cents for 2016 and 2017, respectively.

Other Stocks that Warrant a Look

Some similarly ranked foreign bank stocks include Itaú Unibanco Holding S.A. ITUB, Banco Macro S.A. BMA and Westpac Banking Corporation WBK.You can see the complete list of today’s Zacks #1 Rank stocks here.

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