There may be some questions about the strength of the U.K. economy right now, but Barclays continues to see investment opportunities in the country, naming small- and mid-cap stocks it is betting on right now. The benchmark FTSE 100 index logged returns of 5.7% in 2024, significantly below its U.S. counterparts, with the S & P 500 ending the year up 23.3%. Here are three of the U.K. stocks Barclays is overweight on this year: WHSmith Barclays says it’s betting on books, stationery and gifts retailer WHSmith thanks to a “steady recovery” in sales after the pandemic. That’s “increasing our conviction that structural headwinds will be minimal,” the investment bank’s analysts wrote in a Jan. 6 research note. “Given evidence of recovery, a strong pipeline of new site growth, and improvement in average transaction value, we believe the recovery will ultimately be strong,” they added. Shares in WHSmith are listed on the London Stock Exchange and are down around 13.8% over the last 12 months. Its shares also trade as an American Depositary Receipt (ADR) in the U.S. under the ticker WHTPF . Barclays has a target price of £15.90 ($19.50) on the stock, giving it about 40% upside potential. Bellway Another stock on Barclays’ list is residential property developer Bellway. “While the group has a history of what we see as strong execution, we see scope for volume growth to once again outstrip its peers through the next cycle, and in our view, valuation screens as being relatively compelling vs the sector,” the analysts said. Shares in Bellway are listed on the London Stock Exchange and are down nearly 17.5% over the last 12 months. Its shares also trade as an ADR in the U.S. under the ticker BLWYY . Barclays has a target price of £33.70 on the stock, giving it about 52% upside potential. Weir Group Also on Barclays’ radar is engineering company Weir Group . “Weir ranks as one of the higher-quality businesses in mining equipment in terms of business model (high aftermarket revenue mix), leading market position in a consolidated segment and returns,” the bank’s analysts said in explanation of their bullish stance. They also expect the company to deliver another year of strong growth in fiscal year 2024 thanks to factors like an expansion in its margins. Shares in Weir are listed on the London Stock Exchange and are up around 20% over the last 12 months. Its shares also trade as an ADR in the U.S. under the ticker WEGRY . Barclays has a target price of £23.40 on the stock, giving it just over 6.3% upside potential. — CNBC’s Michael Bloom contributed to this report.
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