Great Britain 1, America 0. We’re winning ladies and gents! In terms of 2025 stock market performance at least. After years of repeated and really quite large hammerings, the Union Jack is fighting back against the Stars and Stripes. With valuations over the pond looking frighteningly high, especially in the tech sector, investors are flocking to more reasonably valued stocks like those on the FTSE 100. I count myself among those who have reallocated capital because of this very trend.
The knock-on effect is an 11% gain for the Footise this year with several months to come. And with the UK’s leading index still trading at around a 30% discount in absolute terms (comparing price-to-earnings ratios), then US-beating stock market gains might be with us for the foreseeable future.
Good times for a change
Barclays (LSE: BARC) is one stock leading the vanguard of recent FTSE 100 excellence, the shares up over four times since a pandemic low point. British banks have long been viewed as mediocre investments, and in fairness, 2013 to 2025 saw zero capital gains, so it’s good to see a turnaround for one of London’s most important sectors.
The good times could keep on rolling for the Blue Eagle Bank given some handsome earnings and revenue projections. I think it’s one to consider.
Thanks to good performance in its investment bank arm, the £51bn market cap giant is expected to steadily grow EPS from 35p in 2024 to 58p in 2027. A share buyback of £1bn has already been announced, and one analyst has put in a 40% increase in the share price as a 12-month target on the stock.
Barclays is already flying, up 38% year-to-date. But could it really turn £10,000 into £14,000 in a year?
Going higher
One reason to think otherwise is that share prices tend to reflect all available information. Yes, the earnings and revenue forecasts for the next few years are very pretty, but they’re also no secret.
Some say those growing profits, which are only expected (not guaranteed) of course, are ‘priced into’ the stock already. It’s more likely that the predicted bigger numbers on the income statement are the reason for the stock’s recent ascent rather than the reason for the stock to keep going higher from here.
That’s not to say the stock won’t continue to surge. Increasing cash flows might not guarantee anything, but they are signs that the company is ticking along smoothly with perhaps a good company culture and shrewd governance. Those are qualities that any investor should be trying to look for in a firm as they are what can underpin long term growth in the stock whatever the short term details are.
This is one of the reasons why I hold Barclays shares myself, even if I’m not banking (ahem) on a 40% rise by this point in 2026.
