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Investing.com - Barclays (LON:BARC) upgraded ING Groep NV (AS:INGA) (NYSE:ING) from Equalweight to Overweight on Tuesday, raising its price target to EUR24.00 from EUR18.40. The bank, currently trading near its 52-week high with a market capitalization of $67.3 billion, has shown remarkable momentum with a 43% price return over the past six months.
The upgrade comes as Barclays sees reduced likelihood of major mergers and acquisitions disrupting ING’s capital return story, despite recent news articles linking the bank to potential M&A activities in Spain and Italy.
While Barclays acknowledges M&A could make sense in markets like Germany, it believes ING should focus on improving returns in its existing business rather than pursuing acquisitions that might derail shareholder returns.
Barclays forecasts ING will deliver capital return yield in the top three across European banks at 36% versus the sector average of 26% for fiscal years 2025-2027.
The investment bank suggests ING’s management should establish minimum hurdle rates for potential M&A to address investor concerns about capital allocation priorities.
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