Can Barclays shares climb 26%? 1 major broker thinks so!

At 520p, Barclays‘ (LSE:BARC) shares are buying and selling just under their five-year excessive of 538p reached in late July. The inventory has climbed roughly 40% over the previous 12 months, but it nonetheless screens as undervalued with a price-to-earnings (P/E) ratio of simply 10.8.

So why does one main dealer nonetheless count on an extra 26% value improve from right here?

What the brokers are saying

Seventeen analysts at present cowl Barclays, with a consensus Reasonable Purchase score and a mean 12-month value goal of 575p (a ten% acquire). However the targets fluctuate broadly, from a cautious 510p at Citi to a bullish 655p from Goldman Sachs, the best amongst main brokers.

Prime dealer value targets:

However is that 655p goal reasonable, and what may derail the expansion story?

The dangers behind the rally

Credit score impairment fees rose to £1.4bn in H1 2026, up from £1.1bn a 12 months earlier. This included a £228m one-off hit from the collapse of UK property lender Market Monetary Options amid fraud allegations.

Administration now guides for the 2026 mortgage loss fee to take a seat across the prime of its 50bps–60bps vary, reflecting ongoing uncertainty in company mortgage high quality. Working bills additionally elevated 8.7% to £4.52bn in Q2, forward of consensus expectations.

However that financial institution’s current robust outcomes go an extended approach to offset that threat. Barclays’ Q2 2026 earnings on July 28 had been actually spectacular. Whole earnings rose 16% to £8.3bn, revenue earlier than tax surged 32% to £3.3bn, and the financial institution raised its full-year 2026 earnings steerage to round £31.5bn. Return on tangible fairness (RoTE) hit 16.1%, nicely above the 12%+ goal.

When wanting on the identical quarter final 12 months, the distinction actually stands out. Right here’s a fast efficiency comparability:

Curiously, the US choices market appears to assume an enormous transfer is coming — a current put possibility exhibits a few of the highest implied volatility throughout your entire fairness choices market. However which course is the actual query.

The underside line

Not each dealer shares Goldman’s bullish sentiment – Citi stays Impartial – however the outlook is majority constructive. JPMorgan, Jefferies, and Financial institution of America all envision double-digit development potential.

That view is supported by fundamentals: robust Funding Financial institution efficiency, raised steerage, and a P/E ratio of 10.8 that is still beneath the sector common.

So for traders who need to improve their publicity to the UK banking sector, I’d say Barclays is an efficient possibility to contemplate proper now.

However don’t ignore the dangers: with credit score impairments rising and prices climbing, it might battle to maintain this momentum via 2026.

Is an extra 26% improve more likely to occur this 12 months? In all probability not, nevertheless it’s not a completely unrealistic goal for the following 12 months — assuming the broader economic system stays secure.

Must you make investments £5,000 in Barclays Plc proper now?

When investing knowledgeable Mark Rogers and his staff have a inventory tip, it could pay to pay attention. 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 prime inventory suggestions from the UK and US markets.

And proper now, Mark thinks there are 6 standout shares that traders ought to think about shopping for. Wish to see if Barclays Plc made the checklist?

Mark Hartley doesn’t maintain any positions within the corporations talked about.