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Barclays‘ (LSE:BARC) share price has posted stunning gains during the past year. Like fellow FTSE 100 rivals including Lloyds and NatWest, its shares have soared as investors have piled into cheap banking stocks.
Over the last 12 months, the shares have risen 69.3% in value. Add a 1.8% trailing dividend yield into the mix, and the bank’s delivered a juicy total return of 71.1%. That would have turned a £10,000 investment a year ago into £17,110 today.
To put that into perspective, the broader FTSE 100’s delivered a far lower (if still strong) 23%. The question is, can Barclays’ share price keep rocketing over the next 12 months?
Still good value?
An examination of the bank’s valuation is worth considering at this point. Unfortunately, this gives only a mixed picture.
At 492.2p per share, Barclays’ forward price-to-earnings (P/E) ratio is 9.1 times. That makes it better value paper than Lloyds (11.2), NatWest (9.4) and HSBC (11.5), which could give it greater scope to rise than other banking shares.
Having said that, the shares don’t exactly smack of value from a historical viewpoint. That P/E ratio for 2026 sails above the 10-year average of 6.9.
As a result, City analysts think the good feeling around Barclays is now basically reflected in the share price. So they’re predicting much more modest price gains for the next 12 months. Nineteen analysts currently have ratings on the FTSE bank. Their price target is 522.6p per share, suggesting a 5.7% uplift from today’s levels.
Considering this, what sort of return could a £10k investment today make over the next year? Including a 2.1% forward dividend yield, this could grow to £10,780, based on a total annual return of 7.8%.
What are the chances?
I wouldn’t be shocked to see Barclays shares deliver a healthy (if lower) return over the next 12 months. Despite tough conditions, it’s shown operational resilience and continues to grow underlying profits and dividends, helped by higher interest rates and strong contributions from its investment banking division. Its US card division has also performed valiantly.
Having said that, I can also see a scenario where Barclays’ share price falls from current levels. The UK economy — from where Barclays generates around half its revenues — continues to struggle, suggesting weak loan growth and rising impairments on the horizon. Net interest margins (NIMs) also look set to keep falling, reflecting the probability of more Bank of England rate cuts and rising competition.
Barclays’ investment bank could again be the differentiator for the next 12 months. However, in the current landscape, it’s tough to predict with any certainty how strong profits here will be looking ahead.
Are Barclays shares a Buy?
Largely speaking, City brokers have a bullish outlook for the bank. Of those 19 with ratings, 14 consider it a Strong Buy or Buy; four a Hold; and just one reckons it’s a Sell.
In my view, investors need to seriously consider the risks Barclays faces, and the implications this could have for its share price. I’m therefore happy to sit on the sidelines. But for more adventurous individuals, it could be a good share to consider.
