Two brokers raise price targets following Tuesday's results, with the investment bank and structural hedge the key drivers of the bull case.
RBC Capital Markets has raised its price target on Barclays PLC (LSE:BARC), the FTSE 100 bank, to 575p from 550p and reiterated its 'outperform' rating, arguing the stock should be trading at a higher multiple relative to peers based on its forecast returns trajectory.
Deutsche Bank also maintained its 'buy' recommendation with a 570p target after concluding that Tuesday's first-quarter results were broadly in line, with all full-year guidance reiterated.
The two notes arrive a day after Barclays reported first-quarter profit before tax of £2.81 billion, broadly matching consensus, with a 6% rise in total income to £8.16 billion driven by a strong showing from the investment bank.
RBC's revised estimates reflect upgrades to both its investment bank and US consumer bank forecasts, with the investment bank division the primary driver of higher projected profit before tax in 2027 and 2028, rising 7% and 8% respectively against prior estimates.
Deutsche's Robert Noble highlighted that while impairment charges were in line with expectations, the benefit of higher interest rates had yet to fully feed through either the reported numbers or market consensus, suggesting further income upgrades may still be in the pipeline.
Noble noted a 2% cost miss versus consensus, attributable to a £105 million motor finance provision top-up, though on a pre-provision basis the results were a 2% beat excluding that charge.
RBC sees structural hedge income as a central pillar of the investment case, forecasting it rises from £7.1 billion in 2026 to £8.6 billion by 2028, ahead of Barclays' own planning assumption of around £3.5 billion on seven-year swap rates.
The Canadian bank models adjusted return on tangible equity of 13.1% this year, building to 14.5% in 2027 and 15.2% in 2028, comfortably ahead of management's guidance of greater than 12% for 2026 and greater than 14% beyond that.
RBC also flagged what it described as deliberately conservative shareholder distribution guidance, suggesting the bank is preserving flexibility for potential acquisitions while maintaining a notional war chest of more than £3.5 billion in excess capital.
With the stock trading at 427p at Tuesday's close, RBC's 575p target implies upside of around 35%, while Deutsche Bank's 570p target points to a similar return.
Up 43% in the last year, the shares were marking time in afternoon trading at 425.95p.