It’s fair to say that 2016 is shaping up to be one of the worst years on record for Barclays’ (LSE: BARC) shareholders. After bringing in a new CEO towards the end of last year, the bank seemed to be getting itself back on track. 

However, during the first quarter of this year new CEO Jes Staley announced that Barclays’ dividend payout would be cut, and Barclays will embark on yet another aggressive restructuring programme. 

Deeper cuts 

Barclays’ shares slumped by as much as 7% at the beginning of March after it published its full-year profits for 2015.

Underlying annual profits for 2015 fell 2% to £5.4bn, and the bank went on to announce a further £1.45bn provision for PPI misselling. Moreover, the group declared that it would cut its dividend by more than half to 3p per share in 2016 and 2017 to save cash, and it’s also planning to sell its 62.3% stake in Barclays Africa at some point during the next two years.

For many investors, Staley’s new restructuring seems to have been the last straw. Heavy selling since the beginning of the year has sent the bank’s shares plunging by around 25%, to a level not seen since 2012. 

Are the shares really cheap? 

Barclays’ shares may be trading close to their lowest level in five years, but this doesn’t mean that they are cheap. Indeed, there have been several times in the past decade when Barclays’ shares have looked cheap compared to the wider FTSE 100 and banking universe. 

Nonetheless, Barclays has continually failed to improve its operating performance and generate positive returns for investors since the financial crisis, and while the bank’s shares may look cheap, it looks as if they’re cheap for a reason. 

City analysts currently expect Barclays’ earnings per share to fall by 5% for 2016 to 15.8p. Next year, analysts have pencilled-in earnings per share growth of 40%, which means that the bank’s shares currently trade at a relatively attractive forward P/E of 12. That said, over the past 12 months City analysts have been consistently revising Barclays’ earnings estimates lower, and there’s no reason to believe that the current figures won’t be adjusted any lower. Specifically, this time last year City analysts were predicting that Barclays would earn 24p per share for 2016 and 29p per share for 2017. As noted above, the consensus now expects Barclays to report earnings per share of 15.8p for 2016 and 22.1p for 2017. 

And for the past five years, Barclays has consistently missed growth forecasts and failed to report any substantial increase in profitability. Between the end of 2011 and 2015, reported pre-tax profit more than halved and earnings per share have fallen by 9p or 35%. 

The bottom line 

So overall, after recent declines Barclays may look cheap but the company has consistently failed to hit profitability targets in the past and there’s no reason to suggest that this trend is set to reverse any time soon. 

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.