Top UK Stocks to Watch: Barclays Highlights This Stock as Leading Investment

Investing.com -- UK flexible workspace provider IWG tops Barclays’ list of most promising UK stocks, with analysts forecasting the company could double its EBITDA and increase free cash flow by 4-5 times over the next five years.

In a comprehensive analysis of the UK market, Barclays has identified five standout stocks across various sectors, with IWG emerging as their highest conviction pick, offering potential upside of nearly 37% to their price target of 320 pence.

International Workplace Group Plc (LON:IWG), which operates serviced office spaces under various brands, is capitalizing on structural changes in the office market where tenants increasingly seek flexible arrangements. The company is expanding through a capital-light model, partnering with landlords who pay for fit-out costs while IWG operates the spaces.

"IWG expects this capital-light model to drive a doubling of EBITDA from around $500 million in FY24 to a run-rate of at least $1 billion by mid-FY29," notes Barclays analyst Paul May, who highlights that free cash flow could more than quadruple during the same period.

Investors should watch for two upcoming catalysts: Q3 results on November 4 and a Capital Markets Day in New York on December 4, where the company is expected to provide FY26 guidance and details on its growth trajectory.

The other top picks in Barclays’ report include:

SSE PLC (LON:SSE), the energy company ranks second with 37.5% potential upside. Barclays views SSE as "best positioned to grow with the grid capex supercycle" with its regulated network expected to triple in value by 2030.

Prudential PLC (LON:PRU): The insurer offers 20.5% upside potential, with near-term focus on its upcoming Indian Asset Management business IPO expected before year-end.

Unilever PLC (LON:ULVR): The consumer goods giant could see 18.4% upside, with the imminent spin-off of its Magnum ice cream business on November 10 expected to improve margins and growth.

Vistry Group PLC (LON:VTYV): The homebuilder is Barclays’ sole "Underweight" recommendation, with analysts forecasting 21% downside due to concerns about the company’s ability to meet growth targets while reducing debt.

The report comes as UK stocks face a mixed outlook, with Barclays’ equity strategists noting that while the FTSE 100 offers defensive value and China exposure, uncertainty around fiscal policy and potential tax hikes could pressure domestic UK assets.