“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset’s value, market conditions, and historical performance.” eyeQ
Close Brothers
Macro Relevance:62%
Model Value: 429.15p
Fair Value Gap: -22.05% discount to model value
Data correct as at 18 March 2026. Please click glossary for explanation of terms. Long-term strategic model.
Numbers from Close Brothers Group (LSE:CBG) landing today made for uncomfortable reading. Adjusted operating profit dropped 19% in the six months to January, the bank posted a statutory pre-tax loss, and the dividend has been suspended again. Add 600 job cuts by the end of 2027, and a short-seller report from Viceroy Research arguing that the lender may need to more than triple its motor finance provisions to as much as £1 billion. Close Brothers pushed back firmly, but the share price fell regardless.
Against that backdrop, the market has done a lot of work already. eyeQ puts macro fair value at 429p against a current price of 353p, a gap of around 22%. That’s the cheapest fair value gap in around 18 months. There are, however, two catches.
One is that for most of the past nine months the big-picture economy was the dominant force driving this stock, but that grip has been loosening, and for that gap to mean something, macro needs to be asserting itself, not stepping back.
Second, macro momentum is falling. eyeQ model value has fallen around 13.5% in the last month alone.
So, for now, this sits in “watch” territory. The discount is real and sizeable, but until macro reasserts itself, the motor finance uncertainty remains the dominant story. And when macro does start to matter again, we need to see model value at least stabilise or ideally turn higher. For now, watch and wait.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it’s cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results – model value, model relevance, Fair Value Gap.
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Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
Please note that our article on this investment should not be considered to be a regular publication.
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