Barclays has experienced a significant uplift after the FTSE banking giant reported an impressive first quarter, fuelled by a robust performance in its investment division.
RBC analysts have upgraded Barclays’ shares, setting a target price of 340p on the stock – a 14 per cent increase, as reported by City AM.
Shares rose by 0.2 per cent during early trading on Tuesday, reaching a near-decade high of over 314p. On Monday, shares peaked at 318.50p before closing at 313.30p.
The lender has seen a rise of over 17 per cent since the start of 2025 and 46 per cent over the past 12 months.
Equity analysts Benjamin Toms and Pablo de la Torre Cuevas suggested an upside scenario could see the bank’s share price reach 370p.
They predicted nearly ÂŁ11bn of returns to shareholders by the end of 2026, through a mix of dividends and buybacks.
The analysts stated that the bank would outperform the sector average in the upcoming 12 months.
Investor caution holding Barclays back
Toms and Cuevas stated “Barclays should be trading at a higher multiple,” but investor sentiment amidst the geopolitical climate had increased caution.
“We see Barclays current valuation as a good entry point, although exposure to US consumers and investment banking is likely to be seen as a reason not to own this stock relative to other UK banks, until the rhetoric around global trade wars subsides,” the analysts said.
Barclays weathered a stormy period following President Donald Trump’s ‘Liberation Day’, which triggered sweeping tariffs on US trading partners and saw its shares plummet to 241.85.
The bank’s stock, however, spearheaded the FTSE 100 recovery after President Trump announced a 90-day truce, resulting in shares leaping by 20% as the markets opened subsequent to his step back.
In spite of the disturbances, Barclays posted a strong performance with a ÂŁ2.7bn pre-tax profit in the first quarter, surpassing analyst expectations of ÂŁ2.5bn, with its investment banking division benefiting from the market volatility.
Revenues for the investment bank surged 16% to ÂŁ3.9bn, up from ÂŁ3.3bn in the corresponding quarter of 2024.
Nevertheless, the bank disclosed a loan loss rate of 61 basis points and made a ÂŁ74m provision against “elevated US macroeconomic uncertainty.”
RBC analysts have advised that a severe response from the Financial Conduct Authority (FCA) to its review into motor finance could negatively impact Barclays’ credit rating and share value.
A judgment from the Supreme Court is anticipated early this summer, with the FCA committing to instigate a redress scheme within six weeks should lenders face an adverse decision.
The apex court will determine whether to uphold the Court of Appeal’s ruling from October, which decreed it illegal for banks to compensate car dealers by way of commission without gaining the customer’s knowledgeable consent.
Barclays has provisioned ÂŁ90m to cover potential compensations.
