Analysts See Further Upside in Barclays Shares (BARC) After Strong Year

Barclays shares (LON: BARC) have had a breakout year, with gains of 71% pushing prices to levels not seen in more than 10 years. There seems to be no signs of a reversal, with analysts projecting bullish momentum to continue into 2025.

Analysts have been hiking price targets on Barclays in recent weeks, with Morgan Stanley setting their target up at 375p, from the prior mark of 315p. With the stock currently changing hands around 266p, this reflects a perceived upside of more than 40%.

Other notable increases include Citi, who have hiked their target from 270 to 305, JP Morgan from 270 to 280, RBC Capital from 270 to 285 and Deutsche Bank from 280 to 320.

These adjustments comes as Barclays sees positive developments in its US operations, sparked by policy shifts and pro-growth initiatives following Donald Trump’s presidential election. The bank aims to boost its revenues to £30 billion by 2026, bolstered by a 4.9% upgrade in its 2025 earnings estimates.

A significant portion of Barclays’ finances is tied to the US dollar, with 40% of its income and 30% of its costs denominated in dollars. Pro-growth policies, including easing capital requirements, a stronger US dollar, and potential tax benefits, are expected to enhance Barclays’ financial performance. Moreover, while its current dividend yield stands at 3%, projections including buybacks suggest that its yield on capital returns could surpass 10% by 2025, offering investors substantial returns.