The Barclays (LSE: BARC) share price has soared 145% over the past five years, while the FTSE 100 has managed just 49%.
Yet even after that storming run, there’s still a consensus price target among City analysts for 540p. That’s around 20% ahead of the price at the time of writing.
But let’s sound a note of caution here. Broker price targets can be fickle. And buying shares based on them alone could be asking for trouble. So let’s take a closer look at Barclays and see what the bigger picture looks like.
Strong start to 2026
Barclays delivered another solid quarter with a 13.5% RoTE in Q126, and double-digit returns in all our businesses … Top line income grew 6% year-on-year, driven by broad based divisional performance including in the Investment Bank, where we generated over £4bn quarterly income for the first time.
— CEO CS Venkatakrishna
A CEO’s supposed to be upbeat at results time. But those numbers mentioned above sound impressive, especially at a time of high inflation and tough global economic conditions.
And to make things even sweeter, once Barclays’ ongoing £1bn share buyback is complete, there’ll be an extension of up to another £500m. The UK’s FTSE 100 banks really can be prolific cash cows. And I rate Barclays as a definite candidate for the very best of them.
What about the rest?
Here’s what forecast bank valuations in price-to-earnings (P/E) terms, and dividend yields, for the UK’s high street big four look like…
| Bank | P/E 2026 | Dividend 2026 | P/E 2027 | Dividend 2027 | P/E 2028 | Dividend 2028 |
| Barclays | 8.5 | 3.3% | 7.0 | 4.1% | 6.0 | 5.1% |
| Lloyds Banking Group | 10.0 | 3.7% | 8.5 | 5.1% | 7.3 | 5.9% |
| NatWest Group | 8.2 | 5.6% | 7.5 | 6.2% | 6.8 | 6.8% |
| HSBC Holdings | 11.2 | 4.2% | 10.0 | 4.6% | 9.2 | 5.1% |
Sources: Yahoo!, MarketScreener, interactive investor
A look at that table says a couple of things to me.
The first comes from checking only the 2026 columns. Based on those P/E valuations and dividend yields, they all look around fair value to me. They’re certainly below the FTSE 100 long-term average P/E multiples. But I see that as deserved in the weak economic times we live in today.
But based on forecasts further ahead… they all look increasingly cheap to me.
Uncertainty ahead
The problem is, banks face various threats. In Q1, Barclays posted credit impairment charges of £823m — largely due to its associaton with collapsed UK mortgage lender Market Financial Solutions.
Remember the way the whole global bank system unravelled when the sub-prime mortgage crisis kicked off and it turned out its tendrils reached everywhere?
I don’t expect anything on that scale again, at least not any time soon. But fears are growing that global credit networks could be getting a bit overstretched.
What should we do about Barclays shares?
Bank stock investors simply have to accept there are unknown risks like this — and diversifying against them is sensible
I’m not sure I’d rate Barclays as the FTSE 100’s very best. But it’s definitely in my top handful that I think are worth evaluating.
Should you invest £5,000 in Barclays Plc right now?
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Alan Oscroft owns shares in Lloyds Banking Group.
