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The Barclays (LSE:BARC) share price has been a stellar performer over the last 12 months. The British banking giant has seen its market-cap rise by more than 50% since June last year, outpacing several of its peers like Lloyds.
There are a variety of reasons behind this outperformance. Most notably, the firm’s more limited exposure to the ongoing automotive financing scandal regarding undisclosed commissions. But management’s savvy use of structural hedges has also helped the net interest margin expand despite the Bank of England cutting interest rates.
The impact of this is made perfectly clear in its latest first quarter results. Pre-tax profits grew 19% to £2.7bn, firmly ahead of the £2.49bn analysts were expecting. With more money flowing to the bottom line, the group’s all-important return on tangible equity (RoTE) also enjoyed an impressive boost to 14% versus 12.3% a year ago.
Consequently, management revised its full-year guidance to be even more aggressive. With that in mind, it’s not so surprising to see Barclays’ share price on an upward trajectory. The question now is, can it continue to climb from here?
What the experts are saying
Even after a strong run, it seems institutional analysts don’t think Barclay’s bull run is quite over yet. While there are a range of opinions, the average consensus forecast puts Barclay’s share price at 367.5p by this time next year. That’s around 12% higher than current levels, which, when combined with a 2.6% dividend yield, certainly suggests the banking stock is on track to beat the long-term stock market average of the FTSE 100.
However, this outlook ultimately depends on management hitting its targets. As previously mentioned, 2025’s kicked off to a solid start.
Yet, one potential source of headache is the ever-changing trade policy of the US government. A protracted trade war in the US could dampen global economic growth and indirectly impact various areas of Barclays’ business, particularly its US operations. And management has already acknowledged tariffs as a potential threat due to the business uncertainty that’s currently being created.
This certainly seems to have spooked the analyst team at Morgan Stanley, which currently has a 230p price target on the stock.
Taking a step back
While a projection of a 30% decline’s alarming, it’s worth remembering that forecasts always need to be taken with a pinch of salt. Morgan Stanley has a reputation for being overly conservative. But even if tariffs do start causing significant problems, Barclays;’ medium- and long-term outlook might still prove resilient.
Last year, management outlined its plans to cut £2bn in annual spending through a combination of artificial intelligence (AI) digitalisation, operational streamlining, and workforce reduction. While the latter’s always unfortunate to hear, these decisions are already delivering results.
Some £150m of efficiency gains were delivered in the first quarter of 2025, with a further £350m expected before the end of the year. When paired with the £1bn achieved in 2024, the business seems to be on track to hit its target.
Putting the external challenges aside, Barclays seems to be firing on all cylinders at the moment. And while the threat of tariffs can’t be ignored, investors looking to invest in banking stocks may be well served to take a closer look at this business. At least, that’s what I think.
