The last five years have been a phenomenal time to be an owner of Barclays (LSE:BARC) shares. By successfully capitalising on higher interest rates and making strides in its investment banking arm, the stock has seen its share price surge by almost 240% since September 2020. And when factoring in the extra gains from dividends, the total return on investment has been closer to 300%!
Skipping ahead to 2025, the bank stock has continued to outperform. Shareholders have reaped a mouth-watering 65% total return, transforming a £1,000 investment at the start of the year into £1,650. For reference, that’s almost five times what the FTSE 100 has delivered over the same period.
Of course, just because a stock has performed well in the past doesn’t guarantee it will continue to beat the market in the future. With that in mind, let’s explore what might lie in store for Barclays shareholders and whether the bank can maintain its current momentum.
Latest Barclays forecasts
Of the 18 institutional analysts following this business, 14 currently have Barclays shares rated as either a Buy or Outperform. And this bullish sentiment is also seemingly reflected in most leading 12-month share price targets this month.
| Analyst | Share Price Target | Potential Gain |
| Morgan Stanley | 420p | +17% |
| UBS | 430p | +19% |
| Kepler Capital | 415p | +15% |
| RBC Capital | 435p | +21% |
| Citi | 350p | -3% |
| JP Morgan | 410p | +14% |
Digging deeper, it seems that most analysts agree that the bank’s improving capital position and persistent net interest margin supported by hedges are paving the way for continued earnings growth. And this positive sentiment has only been compounded by the recently launched £1bn share buyback programme.
On average, it seems that most analysts agree that Barclays shares still have some upward movement in the coming 12 months. But one outlier from the pack is the team at Citi. And to be fair, their more cautious stance isn’t entirely unjustified.
Headwinds to consider
Citi has highlighted a few risk factors that other analysts may have underestimated. The unclear impact of US tariffs could potentially hamper the performance of Barclays’ US consumer business. And we’ve already started to see US credit impairments start to rise in dollar terms – a trend that might accelerate if inflation suddenly starts creeping in.
Citi has also been a bit more conservative with its estimates for Barclays’ ability to expand margins over the medium term. As central bank interest rate cuts slowly start chipping away at the group’s lending margins, improvements in profitability could stall as efficiency gains start to be offset. In other words, investors may be overestimating Barclays’ future earnings growth capabilities.
Nevertheless, despite these headwinds, I remain cautiously optimistic about what’s on the horizon. Management has recently reiterated its medium-term targets, which align with most analyst forecasts. And with Barclays shares still trading at an undemanding earnings multiple, the bank stock could be worth a closer look.
