Shore Capital raised its target price on Barclays PLC (LSE:BARC) to 535p from 450p following full-year results that beat expectations and extended guidance promising return on tangible equity above 14% by 2028.
The broker's revised forecast reflects increased confidence in the bank's ability to deliver sustainable double-digit returns.
Barclays reported profit before tax of £9.1 billion for 2025, up 13% year-on-year and beating consensus by 1%.
Total income rose 9% to £29.1 billion, with net interest income excluding the investment bank up 13% to £12.8 billion. All operating divisions generated double-digit returns on tangible equity, supported by UK lending growth and structural hedge tailwinds.
The bank announced £3.7 billion in shareholder distributions for 2025, comprising a £1 billion buyback and £1.2 billion in dividends.
Management guided to at least £15 billion of distributions between 2026 and 2028, with dividends stepping up sharply to £2 billion in 2026 following investor feedback.
Barclays ended 2025 with a CET1 ratio of 14.3%, above its 13-14% target range and supported by 173 basis points of underlying capital generation.
The bank expects upcoming regulatory risk-weighted asset inflation of £19-26 billion from Basel 3.1 and US consumer bank internal ratings-based migration, but anticipates Pillar 2A reductions will partially offset these increases.
Shore increased its sustainable return on tangible equity estimate to 14% from 12.5%, driven by the improved medium-term outlook and management's apparent buffer within guidance.
The broker maintains Barclays as its favourite amongst large quoted UK banks, citing the diversified growth story and enviable pipeline despite shares trading at roughly 20 times 2026 forecast earnings.
In afternoon trading, the shares were down 2.3% at 452.8p.