Tracking SLB performance through 2025 target misses

Research evidence excerpt

Tracking SLB performance through 2025 target misses

FICC Research

Sustainable Investing

6 July 2026

Tracking SLB performance through

2025 target misses

One year after our first review, evidence continues to suggest

Sustainable Investing Research

that missed targets can create alpha opportunities. Five of Charlotte Edwards, CFA(iii)

eight issuers saw relative outperformance, though the timing +44 (0) 20 3134 0392 charlotte.edwards@barclays.com

and magnitude continues to vary. We screen SLBs with Barclays, UK

end-2026 targets to identify those most at risk of misses. Maggie O'Neal(iii)

+ 44 (0) 20 7773 6924

maggie.oneal@barclays.com

• This year marked a major test for the SLB market. Around 100 index-eligible SLBs had Barclays, UK

target observation dates at the end of 2025, with most issuers now having reported

Dwait Amit Mehta(iii)

performance. In total, we identify 18 SLBs from 12 issuers that missed one or more targets, +91 (0)22 6175 4354

providing the largest dataset yet for assessing how the market responds to target misses. dwaitamit.mehta@barclays.com

Barclays, UK

• Target misses did not drive bond underperformance. In five of the eight issuer case studies

analysed, the affected SLB(s) outperformed other bonds from the same issuer following the

announcement of the miss. The other three issuers broadly traded in line with their wider

bond curves, with little evidence that target misses triggered sustained

underperformance. This suggests that the benefit of the higher coupon (or other penalty

payment) has outweighed the negatives of the target miss in most cases.

• The timing of outperformance varies. Some SLBs outperformed immediately after target

miss announcements, while others only tightened relative to peers over subsequent weeks or

months.