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JP Morgan raises target, estimates on Barclays

Fri Nov 6, 2009 5:04am EST

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Nov 6 (Reuters) - J.P. Morgan Securities raised its price target on the stock of Barclays Plc (BARC.L) to 280 pence from 220 pence, and also upped its earnings estimates on Britain's second biggest bank, largely to reflect higher earnings expectations at Barclays Capital.

The brokerage raised its 2009 earnings-per-share estimates for Barclays by 15 percent to 67 pence and for 2010 by 31 percent to 32 pence, and said it expects equities to account for 20 percent of total BarCap revenues in 2011, up from 12 percent in 2008.

JP Morgan also expects investment banking to grow to 14 percent by 2011 from 11 percent of total BarCap revenues in 2008. Fixed income, currencies and commodities (FICC) would remain the largest contributor at 65 percent of total revenue in 2011, down from 75 percent in 2008, it added.

The brokerage, however, kept its "underweight" rating on the stock, saying it sees further headwinds from regulatory changes to market risk.

Barclays is a top pick amongst the UK domestic banks, JP Morgan said, but HSBC Holdings Plc (HSBA.L) remains the brokerage's top pick in the UK and a favoured bank in the European banking universe.

Shares of Barclays were trading up more than 2 percent at 340.4 pence at 0957 GMT on Friday on the London Stock Exchange.

(Reporting by Mary Meyase in Bangalore; Editing by Maju Samuel)

((mary.meyase@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: mary.meyase.reuters.com@reuters.net)) Keywords: BARCLAYS/RESEARCH JPMORGAN

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