Barclays double-upgrades Virgin Money to 'overweight'

Barclays upgraded its stance on shares of Virgin Money on Wednesday to ‘overweight’ from ‘underweight’ and hiked the price target to 165p from 100p.

The bank said it reckons Virgin Money is best placed to enjoy a mortgage tailwind, which it sees as sustainable from 2021, alongside asset quality better than many peers.

"We see long-term value from strong pre-provision operating profit recovery, with Virgin Money on course for double-digit returns beyond 2022," Barclays said.

"Despite the recent share price rally, we think valuation is attractive at 6.1x 2022e earnings (versus sector at 8.6x) or 0.6x TNAV for a 9.7% return on tangible equity."

At 0955 GMT, the shares were up 4.5% at 148p.