Barclays Shares (LON: BARC) Pause for Breath After Stellar Run

Barclays' shares (LON: BARC) have paused for breath in recent days, giving back 1.05% today, and 4.03% in the past 5 sessions after a breathtaking run over the past year. With the stock price having gained 57.9% over the past year, the recent pause gives markets a moment to reassess and take a closer look at the fundamentals driving price.

The fundamental picture underpinning Barclays' recent strength remains compelling, largely driven by a strong performance in its last financial reporting period that continued a trend. The bank decisively beat consensus expectations for its fourth-quarter and full-year 2024 results, announced in mid-February 2025.

Q4 earnings per share (EPS) landed at 8.60p, well ahead of the anticipated 5.19p, while Q4 revenue of £6.96bn also surpassed estimates of £6.63bn. For the full year 2024, Barclays reported a strong 24% year-on-year jump in profit before tax to £8.1 billion, fueled by revenue growth of 5.56% to £26.79 billion, with notable strength cited in its UK and Investment Banking arms.

From a technical perspective, the signals are currently mixed, painting a complex picture for traders. A notable development occurred on March 28th when Barclays' share price slipped below its 50-day moving average, a technical indicator often viewed as a potential sign of weakening short-term momentum. Yet, this potentially bearish signal is counterbalanced by analysis highlighting the stock's consistent long-term performance.

Attention now shifts to the upcoming first-quarter 2025 earnings release, tentatively scheduled for April 30th. The full-year 2025 consensus EPS forecast sits around 39.11p, suggesting expectations for continued growth.

Analysts will be keenly focused on whether the bank can maintain momentum, particularly regarding its Net Interest Income guidance (previously £12.2bn for FY25) and the performance of its key divisions. Barclays’ track record of surpassing analyst estimates over the past year sets a high bar for the upcoming report, with markets likely to expect more of the same.

The consensus among analysts leans heavily towards ‘Buy', with the average price targets of 350.50p implying over 20% upside from current price action. More recently, Exane upgraded Barclays shares to Outperform from Neutral, alongside their own bullish price target of 370p.

🟩 The Bull Case

• Proven Earnings Power: Delivered strong beats on Q4 2024 EPS and revenue; FY2024 Profit Before Tax surged 24% YoY.
• Shareholder Returns Focus: Actively returning capital via £1bn buyback (announced Feb) and increased FY24 dividend (8.0p, +5%).
• Divisional Strength: Demonstrated solid performance in core UK and Investment Banking segments in Q4.
• Consistent Outperformance: History of exceeding analyst EPS and revenue forecasts over the past year.

🟥 The Bear Case

• Recent Momentum Loss: Share price has retreated from March highs, showing negative weekly and monthly returns.
• Technical Warning Sign: Price recently broke below the 50-day moving average, a potential short-term negative indicator.
• Economic Uncertainty: Broader economic slowdown or faster-than-expected interest rate cuts could potentially squeeze banking margins.

With U.S earnings season set to kick off again next week with the banks, and tariffs dominating talk on the day, Barclays' continued stability stands in contrast to a lot of the volatility being seen elsewhere.