Does the Barclays share price make it a no-brainer buy for 2024?

The Barclays share price gained a little ground on February’s FY2023 results. Here’s why I think there could be a lot more to come.

| More on:
Investor looking at stock graph on a tablet with their finger hovering over the Buy button

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

When I look at the Barclays (LSE: BARC) share price, I really wonder what’s holding investors back from buying.

I know there are reasons why bank shares are down right now. Barclays shares have actually ticked up a bit in the past few weeks too. And they’re about flat over five years, which is not quite a disaster.

Still, Barclays has still been an investment disappointment since even before the 2020 stock market crash. In fact, FTSE 100 banks in general have had a dreadful decade and more.

Weak share price

With earnings rising, forecasts put the stock on a price-to-earnings (P/E) ratio of only 5.5. And it could drop as low as four by 2026. And however we think we should value bank stocks, that just looks way too low to me.

In results posted on 20 February, Barclays announced a new £1bn share buyback. what’s more, the board said it plans “to return at least £10bn of capital to shareholders between 2024 and 2026, through dividends and share buybacks, with a continued preference for buybacks.

The whole market cap is £25bn. So for any share we buy at today’s price, the bank wants to return the equivalent of 40% to us in the next three years. Who wouldn’t want a slice of that?

That there’s a preference for buybacks suggests the board sees the shares as cheap. But we still have forecast dividend yields of 5%, and rising, to look forward to.

Why so low?

The share price did perk up a bit on this news. But I’d say it’s barely a scratch on where the true valuation should be.

So why are the shares so low, and what are the risks? Well, I can’t pretend there aren’t any.

Barclays reported lower profits in 2023, with the final quarter looking tough again. The company also faced costs of restructuring into five key divisions. That’s supposed to result in costs savings and a workforce reduction. But we won’t know how it will work out for a while yet.

The bank is also the only UK one that still has a large investment banking arm. And that adds extra risk, at a time when the global economy is so uncertain.

I think Barclays’ structure and business spread is a good one. It does make the bank stand out as unique among its UK peers. But how it all works out will be crucial for where the share price goes.


One day we’ll get back to low interest rates, falling bad debt risk, stable fuel prices and global economic growth. If Barclays shares were still about the same price when that happened, I think they really would be a no-brainer buy.

Between now and then, investors need to weigh up the low valuation with today’s risks.

For me, though, Barclays is firmly on my Stocks and Shares ISA buy list for when I next have the cash to invest.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

Investing freedom — but inside a pension

Strapped consumers might be cutting back on investing, but they’re still keeping up their pension contributions. The only problem? A…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Forget gold! I’d rather buy these 3 FTSE high-yielders in a Stocks and Shares ISA

Gold looks like a risky investment to me as the price hits an all-time high. I'm ignoring the fuss to…

Read more »

Young female business analyst looking at a graph chart while working from home
Growth Shares

This 55p UK stock could rise more than 300%, according to a City broker

This UK stock has fallen from above 800p to below 60p. But analysts at Citi believe it’s capable of a…

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

I think this FTSE 250 trust has all the right ingredients to lock in long-term profits

Today I'm examining the prospects of a private equity investment trust on the FTSE 250 that caught my attention recently…

Read more »

Young black man looking at phone while on the London Overground
Investing Articles

2 under-the-radar UK shares investors should consider snapping up

Two UK shares have caught the eye of our writer. She explains why investors should be taking a closer look…

Read more »

Investing Articles

Are these 2 ultra-high-yielding income stocks a good buy for me?

These two income stocks often split the debate amongst investors. So what does our writer think of them as potential…

Read more »

Senior woman potting plant in garden at home
Investing Articles

5% yield! This dividend stock could be great for my retirement

Our writer explains why this dividend stock appeals to her as she’s investing to build wealth to enjoy in the…

Read more »

A young Asian woman holding up her index finger
Investing Articles

I’d aim for a second income of £1,000 a month with this super-reliable dividend stock

I think a great way to build a second income stream is by investing in dividend stocks via a Stocks…

Read more »