Close Brothers Group PLC 

Close Brothers Group PLC (LSE: CBG) is an FTSE 250 listed leading UK merchant banking group providing lending, deposit taking, wealth management services, and securities trading. The Company employs around 3,700 people in the UK. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Sell at GBX 756.00

• Resistance near Current levels: CBG stock price is in the downtrend forming lower lows and lower highs and any fresh uptick might be potentially used to further liquidate the holdings by the investors. Considering the market conditions and the price action, it is prudent to exit the stock, as the prices might pull back from these levels.
• Sluggish Financial Performance: The company reported a decline of 52% in the Adjusted Operating Profit at GBP 113.5 mn in FY23 as compared to the Adjusted Operating Profit of GBP 234.8 mn pcp. Also, the Adjusted basic Earnings per share slipped by 51% to GBX 55.1 per share in FY23 against GBX 111.5 per share in FY22.
• Higher Operating Expenses: The bank reported an increase of 3% in the operating expenses which stood at GBP 615.0 mn in FY23 as compared to GBP 598.0 mn in FY22. Also, the group’s expense-to-income ratio surged to 66% during FY23, as compared to 64% in FY22.

Share Price Chart  

Conclusion

Based on the macroeconomic challenges, and price action stance, a "SELL" recommendation on Close Brothers Group PLC (LSE: CBG) has been given at the current market price of GBX 756.00 (as of 24 October 2023 10:00 AM, GMT+1).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 24 October 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

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