Here’s why I think the Barclays share price could top the FTSE 100 banks in 2025

The Barclays share price has seen a strong resurgence in 2024 after years out in the cold. Can 2025 carry on the upwards trend?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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.

With a rise of a shade under 80% in 2024, the Barclays (LSE: BARC) share price has only fallen short of this year’s winning bank by a fraction.

NatWest Group just edged it out. Or at least, it has done with a few market days left before the year ends. So maybe there’s still time for change.

Created with Highcharts 11.4.3Barclays Plc + NatWest Group Plc PriceZoom1M3M6MYTD1Y5Y10YALL0www.fool.co.uk

International strength

One thing I think could propel Barclays to the winning position in 2025 is, perhaps ironically, also something I see as one of its key risks.

Should you invest £1,000 in Amazon right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Amazon made the list?

See the 6 stocks

At Q3 time, the company told us that Barclays Investment Bank “has a diverse income profile across businesses and geographies including a significant presence in the US.” That arm of the business contributed £3,303m in profit before tax in the first nine months of the year.

Global corporate and investment banking has been known to go a bit wrong in the past. And after the financial crisis, Barclays was the only UK bank that really stuck with it.

It could go wrong again. But in the first year of the new US administration, with President-elect Trump seemingly more likely to loosen banking regulation than tighten anything? I reckon Barclays could get a boost that its UK high street competitors will miss.

Latest scandal

I can’t look at any UK bank without thinking about the current car loan mis-selling probe. It affects Barclays, which has been in the news in recent days.

The bank had appealed a ruling by the Financial Ombudsman Service that it had failed to treat a car loan customer fairly. But a judge has dismissed the appeal.

Some observers suggest the total hit to the banks could reach £38bn.

But at least Barclays’ expected share of it looks relatively low right now. Estimates suggest its provisions should be well below Lloyds Banking Group‘s, for example. So it’s not a good thing, but it might be relatively not as bad.

Cash flowing

The Barclays share price has surely been helped by the bank’s approach to rewarding shareholders with cash. We’re only looking at a forecast 3.1% dividend yield for this year, though forecasts show it rising in the next few years.

But I think Barclays’ big winner is its aggressive share buyback strategy. At the end of the last full year, the bank 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“.

That’s worth more than a quarter of Barclays’ total market-cap. As well as any per-share improvements that buybacks can generate, it surely has to boost investor sentiment too.

Valuation

I just noticed something else. Looking at forecasts out to 2026, the Barclays price-to-earnings (P/E) ratio’s estimated at just 5.5 by then. That’s firmly below Lloyds, NatWest and HSBC Holdings.

International uncertainty, mis-selling, a dodgy economic outlook… they all mean risks for banks in 2025. But I think investors with a long-term vision might consider them worth taking.

Should you buy Amazon now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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 positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Barclays Plc, HSBC Holdings, and Lloyds Banking Group 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.

Pound coins for sale — 51 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Investing Articles

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

£10,000 invested in Tesla stock at Christmas is now worth…

Tesla stock has been one of best-performing investments of the past decade. But things haven't gone to plan for investors…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

25% total return in a year? Is now the perfect time to buy BP shares?

BP shares are on the front line of today's global economic and political uncertainty but analysts think they can still…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

With Cash ISA changes coming, could now be the time to consider buying shares?

Changes to the Cash ISA could lead to greater investment in the stock market. This could be a good thing…

Read more »

Investing Articles

These FTSE 100 dividend shares just got cheaper, thanks to President Trump!

Investors buying dividend shares can lock in bigger long-term yields when share prices take a tumble. These two just did…

Read more »