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‘Hard to ignore’: Barclays says these struggling European banks are now a buy

Key Points
  • Barclays has identified three European banks in particular that investors should be looking to pick up.
  • "As analysts we have generally been quite cautious on their longer-term prospects. Nevertheless, whilst risks remain, at these levels we find valuations hard to ignore," Barclays analysts said.
Jasper Juinen | Bloomberg | Getty Images

LONDON - With a number of European banks trading at all-time low valuations, Barclays analysts have identified several which they say are now "too cheap" for investors to ignore.

The Stoxx 600 Banks index is down more than 38% since the turn of the year. In a note Tuesday, Barclays European banking analysts suggested that the market appears to be discounting either share dilution or profitability remaining at 2020-2021 levels indefinitely.

Although acknowledging that the possibility of fresh lockdowns could lead to further economic concerns, analysts Amit Goel and Jun Yang said this would likely be accompanied by an expansion of support measures. They suggested that investors should begin selectively building their exposure to European banks.

"As analysts we have generally been quite cautious on their longer-term prospects. Nevertheless, whilst risks remain, at these levels we find valuations hard to ignore," they said.

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