Analysts have rated the two major UK banking stocks, Barclays PLC (GB:BARC) and NatWest Group (GB:NWG), from the FTSE 100 index as Strong Buy. The Strong Buy rating is a good indicator for spotting stocks positioned for long-term growth. As per analysts’ average price target, BARC stock offers a potential share price growth of over 21%, while NWG shows a more modest upside of around 16%.
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Some of the world’s leading banking shares are listed on the LSE (London Stock Exchange). These banks have played a vital role in shaping the British economy by funding businesses nationwide. They offer strong dividends and steady growth, making them favourable choices for investors.
Here, we have used TipRanks’ Stock Comparison Tool for banking shares to identify these two stocks. This tool comprises all the banking stocks listed on the LSE and has various parameters to help users select the right one based on their preferences.
Let’s have a look at the details.
Barclays PLC
Barclays ranks among the top four banks in the UK, serving approximately 48 million customers globally.
Year-to-date, BARC stock has increased by 45.4%, primarily due to the launch of a major restructuring plan aimed at improving efficiency and boosting profits. Introduced alongside its 2023 results in February, the overhaul plan targets £2 billion in cost savings by 2026. Additionally, Barclays plans to return at least £10 billion to shareholders through dividends and share buybacks between 2024 and 2026.
Earlier this month, Barclays released its half-yearly results for 2024. The bank reported a 10% decrease in net profit attributable to shareholders of £2.8 billion, due to a decline in net interest income from its core UK units. Barclays UK saw a 4% year-on-year decrease in net interest income, totalling £3.15 billion for the first half.
Is Barclays a Good Stock to Buy?
After the release of the H1 results, analysts reaffirmed their confidence in Barclays stock, with five analysts maintaining their Buy ratings. Most recently, Jefferies analyst Joseph Dickerson reiterated a Buy rating, projecting over 50% upside potential.
On TipRanks, BARC stock has a Strong Buy rating based on nine Buys and one Sell recommendation. The Barclays share price target is 274p.
See more BARC analyst ratings.
NatWest Group
NatWest ranks among the top four banks in the UK, serving 19 million customers globally. Year-to-date, NWG stock has gained 54% in trading.
Despite reporting lower profits in its half-yearly results, NatWest upgraded its outlook for full-year 2024. In the first half, NatWest’s operating profit before tax dropped by 15.6%, largely due to intense competition in the mortgage sector. Furthermore, the bank’s profit attributable to shareholders decreased by 8.7% year-over-year to £2.1 billion.
Nonetheless, for the full year 2024, NatWest raised its forecast for return on tangible equity (ROTE) and expects it to exceed 14%, up from the previous outlook of 12%. Additionally, annual income is now projected to reach approximately £14 billion, surpassing the earlier forecast of £13 billion to £13.5 billion.
Is NatWest a Good Buy?
Following its H1 results, NWG stock received five Buy ratings from analysts.
According to TipRanks consensus, NWG stock has received seven Buy and two Hold recommendations. The NatWest Group share price forecast is 396.44p, implying 16% upside potential from the current price level.
Conclusion
Amid daily stock market fluctuations, both BARC and NWG stocks provide a good investment opportunity for investors seeking long-term growth. The Strong Buy ratings from analysts support a solid investment case.
