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The Barclays (LSE: BARC) share value has been on a tear, rising 165% over 5 years and nonetheless blasting merrily alongside, with a 32% acquire over the past 12 months. At present, that’s not significantly uncommon for a FTSE 100 financial institution. Greater rates of interest have usually been good for banks as a result of they will earn extra from the distinction between what they cost debtors and pay savers.
Barclays’ UK web curiosity margin rose to three.7% within the first half of 2026, from 3.55% a yr earlier. It’s a key profitability metric.
Buyers anticipated rates of interest to fall this yr, which might have squeezed these margins, however the Iran battle modified that. No person is anticipating charge cuts at this time. They may even climb.
Excessive charges generally is a double-edged sword although. They make borrowing costlier, doubtlessly weakening demand for mortgages and loans, and growing unhealthy money owed.
How dangerous is that this FTSE 100 financial institution?
In April, Barclays took a £228m hit after the collapse of UK mortgage lender Market Monetary Options, amid allegations of fraud. This highlighted worries about its publicity to the shadow banking sector.
Barclays retains a considerable operation within the US, each in company and funding banking. That offers it extra alternatives to generate income when markets are booming, but in addition exposes it to extra unstable buying and selling circumstances and doubtlessly greater losses. It’s additionally seeking to increase into the Center East and Asia.
Its Q2 (28 July) outcomes had been spectacular. Earnings jumped 16% to £8.3bn, beating expectations, whereas revenue earlier than tax surged 31% to £3.3bn. The funding financial institution was the star performer. But the shares fell after the outcomes as a result of markets anticipated even higher.
There are dangers down the highway. The UK authorities might enhance the banking sector’s windfall tax within the autumn Price range, hitting income, whereas a weaker world economic system might hit lending and enhance unhealthy money owed.
But Barclays seems to be fairly valued to me at round 11.25 instances earnings. The trailing dividend yield of 1.75% is much less thrilling, however Barclays intends to return most of its capital to shareholders by means of share buybacks. In complete, it plans to distribute a thumping £15bn between 2026 and 2028.
So what do the specialists suppose?
The 18 analysts providing one-year share value forecasts produce a consensus goal of 576p. That will be a 16.4% acquire from at this time’s 495p. Add the forecast 3.1% dividend yield and the potential complete return rises to 19.5%. That will flip £4,999 into about £5,974, which isn’t too shabby. These are forecasts, in fact. Nothing is assured
Of 20 analysts giving scores over the past three months, 13 name Barclays a Sturdy Purchase and two extra say Purchase. None says Promote.
The following yr may very well be bumpy. However with sturdy income, a modest valuation and hefty shareholder returns, I believe Barclays is nicely value contemplating at this time. I’d purchase it myself. Sadly, I’m already massively uncovered to the fortunes of FTSE 100 banks and so they’ve rewarded me handsomely.
Do you have to make investments £5,000 in Barclays Plc proper now?
When investing skilled Mark Rogers and his group have a inventory tip, it could possibly pay to hear. In any case, the flagship Twelfth Magpie Share Advisor e-newsletter he has run for practically a decade has supplied 1000’s of paying members with high inventory suggestions from the UK and US markets.
And proper now, Mark thinks there are 6 standout shares that buyers ought to think about shopping for. Need to see if Barclays Plc made the checklist?
Harvey Jones doesn’t maintain any positions within the firms talked about.
