Barclays’ Strong Q1 Performance and Positive Outlook Justify Buy Rating Despite US Impairment Challenges

Bank of America Securities analyst Perlie Mong maintained a Buy rating on Barclays (BARC – Research Report) today and set a price target of p370.00.

Perlie Mong has given his Buy rating due to a combination of factors including Barclays’ strong performance in the first quarter. The bank reported an underlying profit before tax that exceeded expectations by 9%, primarily driven by a significant income beat, particularly within its Investment Bank division, which saw a 16% year-on-year increase. This robust performance was somewhat offset by an impairment miss, which included adjustments reflecting economic uncertainties in the US.
Additionally, Barclays’ UK operations showed positive trends, with net interest income surpassing consensus and upgraded guidance for 2025. The bank’s management also noted improvements in deposit trends and structural hedge reinvestment assumptions. Despite some impairment challenges in the US consumer division, credit quality remained stable, with no signs of stress. Overall, the improved net interest income guidance and stable credit conditions contributed to the Buy rating.

In another report released on April 22, Citi also maintained a Buy rating on the stock with a p345.00 price target.