Proactive Investors - Barclays PLC (LON:BARC) is looking good at the moment according to the analysts at JP Morgan (NYSE:JPM), who see the UK bank as inexpensive with good capital return potential.
Capital ratios (CT1 13.6% vs target of 13-14%) are healthy and share buybacks of £1.75bn are expected in 2024/25 and £2.5bn 2026, implying double-digit annual yields.
Management wants to raise RoTE [return on tangible equity] to above 12% by 2026 with potential upside to forecasts based on the execution of the plan.
Resources will also be switched from the investment bank to other high-returning parts of the business such as the UK, recently boosted by the Tesco (LON:TSCO) acquisition.
“US Cards offer another area of growth with J-curve benefits also expected to be felt in the medium term.”
“Longer term, we see growth opportunities within the UK Corporate Bank through closer integration with the Investment Bank, Wealth and further CIB diversification to support the earnings outlook.”
The price target of 270p is calculated using blended ratios and ‘overweight’ the investment stance.
Shares are 223p.