Barclays shares (LON: BARC) are a key component of the FTSE 100 index, and a UK banking giant. Headquartered in London, Barclays traces its roots back hundreds of years. The stock can also be found on ticker BARC.L, depending on the platform you use.
The multinational bank is a behemoth that caters to a diverse clientele, offering a comprehensive range of financial services across its two main divisions: Barclays UK and Barclays International.
The Barclays UK segment serves individuals and small businesses through personal and business banking services, including current accounts, loans, mortgages, and credit cards. Meanwhile, Barclays International focuses on larger corporations and institutions, providing corporate and investment banking, wealth management, and trading services. This arm extends globally, with a prominent presence in regions around the world.
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Barclays EPS and Revenue Breakdown 2020-2023
| Barclays | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | 8.8p | £21.77 billion |
| 2021 | 37.5p | £21.94 billion |
| 2022 | 30.8p | £24.96 billion |
| 2023 | 32.4p | £25.38 billion |
Barclays boasts a notable history dating back to 1690, when it began as a small goldsmith banking business in London. Founded by John Freame and Thomas Gould, they primarily provided loans and secured valuables for merchants. By 1736, James Barclay joined the partnership, introducing the “Barclay” name that would soon become synonymous with banking.
Over the ensuing centuries, Barclays strategically expanded through mergers and acquisitions, growing into a prominent player in the British banking scene. In 2008, the bank acquired Lehman Brothers’ core capital markets businesses. While it boosted their global reach, it also exposed them to the challenges of the financial crisis.
Barclays has since focused on retail and wealth management. They have embraced digital innovation, implementing mobile banking and AI-powered features to shape their future.
Banking Industry Dividend Comparison
Will Barclays Share Price Ever Recover?
Since the fall during the 2008 financial crisis, the Barclays share price has been somewhat stagnant, failing to gain any upside momentum and slowly trending lower despite interest rate rises beginning at the end of 2021. Pre-Global Financial Crisis in 2007, Barclays shares traded over the 700p mark. Over the last few years, the stock has failed to break above 300p per share.
Despite recent challenges, Barclays shares have recently surged, marking an 11-day win streak – the company’s longest in at least 25 years as of February 28, 2024. Will Barclays share price go up to near previous levels, or are we set for further years of sideways movement? Price predictions are notoriously difficult, but let’s take a look at the data and the forecasts from the market.
Barclays Share Price Forecast
The current consensus rating for Barclays shares is a Buy, according to TipRanks, which compiled the estimates of nine analysts. The analyst consensus price target is 270.75p per share, which represents a potential 18% upside from its 228p share price seen in July 2024.
Last year, Morgan Stanley upgraded Barclays to Overweight from Equal Weight, lifting the price target 230p from 190p per share. Analysts at Morgan Stanley said Barclays estimates are ahead of consensus for the first time. In addition, Morgan Stanley said it believes upgrades to earnings will drive the stock higher while there is room for capital efficiency at Barclays. An improved sales and payout outlook was also cited for the upgrade.
On the other hand, Bank of America downgraded Barclays to Underperform in 2023. The firm told investors in a note following Barclays Q3 earnings that a “potential material but unspecified restructuring charge to deliver unspecified benefits over an unspecified time period” adds further uncertainty about the bank’s strategy and financial targets. Furthermore, BofA noted near-term risks to Barclays capital distributions and uncertain profitability benefits for the downgrade.
Our view: Predicting the Barclays share price in 5 years time for a longer outlook is challenging. More of a challenge than we would usually look for when adding to our own portfolios. With Barclays recently unveiling a significant revamp, it remains to be seen whether the bank can achieve its lofty revenue goals, with most analysts sceptical. We take more of a wait-and-see approach.
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Barclays Suitability
Given the somewhat sideways movement of Barclays shares over the last few years, the stock may be best suited for those who, firstly, have a long-term investment horizon. Given that any hint of upside momentum could take some time to arrive, those who are more patient may be better suited to invest in Barclays
Secondly, as Barclays shares offer a reliable dividend yield (4.5%+ over the past years), the stock should be attractive to dividend investors seeking regular income. Those who prioritize receiving consistent dividend payouts over potential short-term share price gains should have the patience to stay with Barclays shares for the long run.
