Barclays PLC (LSE:BARC) nudged up on Tuesday after UBS reiterated its 'buy' rating and lifted its price target to 515p from 455p, arguing the bank is heading into 2026 with strengthening momentum and one of the most compelling growth profiles in the sector.
The Swiss bank expects Barclays to unveil refreshed strategic targets on 10 February, including a statutory return on tangible equity above 13% for 2028.
It said the update should shine a light on “the EPS growth on offer”, noting its forecast for 2027 adjusted earnings per share sits 44% above 2025 levels. It also pointed to management’s track record of beating the current plan.
The analysts highlighted progress across key divisions. Barclays UK continues to benefit from the structural hedge and the acquisitions of Tesco Bank and Kensington, while UK Corporate has delivered “much better margins” and greater lending volumes.
The investment bank has also been a consistent bright spot, outpacing consensus expectations for seven straight quarters.
The more contentious area is US Consumer, where the potential purchase of Best Egg has divided opinion, but UBS said it was encouraged that management is taking action and does not see the outcome as decisive for the investment case.
UBS maintained that the real opportunity lies in valuation. Barclays trades on 7.9 times and 6.9 times expected earnings for 2026 and 2027, respectively, and at about 1.1 times tangible net asset value.
If the bank achieves its plan, UBS argues the shares would sit at 8.4 times 2027 earnings (still a discount to the sector), leaving “19% upside” to its target.
Calling Barclays a “top pick” among European banks, UBS said the combination of lowly valued earnings growth and improving returns makes the shares “seriously attractively valued”.
The shares rose just under 1% to 440.35p.