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RBS Share Price: What to Expect from Q4 Results

By Shaun MurisonStock MarketsFeb 11, 2019 11:30
za.investing.com/analysis/rbs-share-price-what-to-expect-from-q4-results-200198157
RBS Share Price: What to Expect from Q4 Results
By Shaun Murison   |  Feb 11, 2019 11:30
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Investors will be looking for improving returns and a reduction in costs to help drive an improved return on equity (ROE) for shareholders, as well as the group's back-up plans for risks relating to a looming Brexit.

When is RBS’s results date?

The Royal Bank of Scotland (LON:RBS), the New York Stock Exchange (ADR) and FTSE-listed international and financial services provider is scheduled to release fourth quarter (Q4) 2018 results on Friday 15 February 2019.

What does the City expect?

Bloomberg consensus estimates for Q4 2019 results are as follows:

RBS Q4 results metric
RBS Q4 results metric

In terms of the annual results, estimates are as follows:

RBS annual results metric
RBS annual results metric

How to trade the RBS results

Markets will be wanting to see RBS producing results on its suggested deliverable of improving returns 'driven by sustainable growth' primarily within the group’s core businesses. Investors and traders alike will be focused on how the group is managing to contain costs as well as deal with margin pressure within the competitive mortgage business.

The banking sector by default incurs risk from the upcoming UK separation from the European Union (EU) as UK banks generate a good proportion of their respective revenues – roughly a quarter - from the EU. Markets will want to know on the eve of the Brexit deadline what the group’s contingency plans are for the numerous outcomes the event could hold.

It would, however, appear that traders (short-term) and analysts (long-term) are optimistic on the outlook for the RBS.

RBS share price: technical analysis

RBS share price
RBS share price

A chart of RBS shows some mixed signals when applying conventional technical analysis indicators (moving averages and stochastic).

  • The 20-day simple moving average (SMA) is trading above the 50 SMA, suggestive of the short- to medium-term price trends being up
  • The price has now crossed above the 200 SMA which suggests that the long-term downtrend has now been broken - although this does not yet confirm the long-term trend to be up
  • The stochastic trades in overbought territory suggesting that the short-term gains may be reaching a point of capitulation

The overbought signal does conflict with the moving average suggestions that the short to medium trends are up. We do, however, place more validity on the indications of trend (moving averages) rather than those of momentum (stochastic).

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RBS Share Price: What to Expect from Q4 Results
 
RBS Share Price: What to Expect from Q4 Results

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