Barclays (LSE:BARC) shares have has a pretty disappointing 2026 so far, falling by 2.1%.
The FTSE 100 has grown by 5.2% in comparison, so the bank’s shares have underperformed.
However, over the last five years, it’s been a different story. The company’s shares have risen by 160.2%, while the Footsie has only returned 46.7%. So, they’ve generally been overperforming.
Now, can Barclays shares get back to making strong returns for investors? Let’s see what they could be worth by the end of 2027.
How I’ll compute my valuation
To come up with a valuation for the firm’s shares, I’m going to look at what analysts are currently forecasting for the company’s earnings per share (EPS) over the next couple of years:
- 2025: 43p (already achieved)
- 2026: 52p
- 2027: 63p
The shares also trade at a price-to-earnings (P/E) ratio of 10.9.
So, applying this P/E to these earnings, its shares could be worth 566.8p in 2026 and 686.7p in 2027.
Based on the current share price of 469.4p, this represents a 20.7% increase for the rest of 2026, and a further 21.2% rise in 2027. Overall, this would be a 46.3% total increase.
Now, that’s not too bad at all. In fact, I’m pretty sure most investors would be very happy with that.
However, it should be noted that this is just a prediction based on analyst forecasts. These aren’t always correct, and there’s also a lot of variation in their estimates. For example, at the low end, EPS is only expected to be 48p in 2026 and 56p in 2027. I used average estimates in my computation.
Let’s see what might prevent Barclays from achieving such high earnings growth.
Growth slowdown
The biggest concern for the bank right now relates to a slowdown in the global economy. The OECD recently warned that if the war in Iran becomes long term and creeps into 2027, then many countries could be facing recessions.
For example, the UK economy contracted by 0.1% in April, as businesses started to feel the impact of the war. This could raise the chance of loan defaults occurring.
It’s been repeatedly said that the conflict is close to an end, but this has been said so many times that it’s impossible to predict. A peace deal is no guarantee of a lasting peace either.
That said, there are still reasons to be optimistic about the company.
Margin expansion
What I like most about the bank right now is how it’s actively trying to become more cost-efficient.
It’s using AI to help it achieve this, targeting £2bn in cost savings over the next three financial years.
If we go back to the analyst forecasts, and instead look at revenue, these are the predictions:
- 2025: £29.1bn (already achieved)
- 2026: £31.1bn – 6.6% growth
- 2027: £32.5bn – 4.7% growth
This is respectable growth, but it’s nowhere near the estimated growth in earnings seen when I was working out a valuation for its shares.
This isn’t a bad thing either, because it shows the firm is expanding its margins and becoming more profitable even if revenue growth slows down.
Of course, there are no guarantees, but based on what analysts think, I feel investors could consider exploring Barclays shares further.
Should you invest £5,000 in Barclays Plc right now?
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Muhammad Cheema does not hold any positions in the companies mentioned.
