Where Is Barclays Stock Headed?

-8.63%
Downside
9.45
Market
8.63
Trefis
BCS: Barclays logo
BCS
Barclays

Barclays’ stock (NYSE: BCS) has lost 1% YTD, as compared to the 10% rise in the S&P500 over the same period. Further, it is currently trading at $8 per share, which is 33% below its fair value of $12 – Trefis’ estimate for Barclays’ valuationThe bank outperformed the consensus estimates of net profit in the first quarter of 2023. It reported total revenues of $8.79 billion – up 1% y-o-y, driven by a 4% growth in Barclays UK revenues due to higher net interest income. However, it was partially offset by a 2% drop in the Barclays International segment. Notably, the Barclays International segment posted positive growth on a currency-neutral basis. On the cost front, the provisions for credit losses witnessed an unfavorable build-up in the quarter, offset by lower operating expenses as a % of revenues. Overall, the firm posted a profit before tax of $3.1 billion – up 2% y-o-y (Note – Barclays originally reports in GBP (Pound), the same has been converted to USD for ease of comparison).

The bank’s top line grew 2% y-o-y to $30.9 billion in FY 2022. It was mainly because of growth in the consumer, cards & payments segment. Further, the total net interest income in the year increased by 18% y-o-y due to improvement in the interest rates. On the flip side, the corporate & investment bank revenues were down due to lower corporate lending and investment banking income. In addition, the litigation and conduct expenses increased in the year, negatively impacting the bottom line – the adjusted net income was reduced by 27% y-o-y to $6.2 billion.

Moving forward, we expect the net interest income to drive the company’s growth in Q2. Barclays’ revenues are estimated to touch $33.28 billion in FY2023. Additionally, BCS’s adjusted net income margin is likely to remain around 20%, leading to an adjusted net income of $6.6 billion and an annual GAAP EPS of $1.65. This coupled with a P/E multiple of 7x will lead to a valuation of $12.

Relevant Articles
  1. Barclays Stock Trailed S&P 500 By 23% In 2023, What Happens Next?
  2. Barclays Stock Is Undervalued
  3. Barclays Stock Is Undervalued
  4. What To Expect From Barclays Stock?
  5. After Earnings Miss In Q2, Where Is Barclays Stock Headed?
  6. Is Barclays Stock Undervalued?

What if you’re looking for a high-performance portfolio with a low downside instead? Here’s a reinforced value portfolio that has beaten the market consistently while limiting losses during periods of sharp market declines.

 Returns May 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 BCS Return -4% -1% -27%
 S&P 500 Return 1% 10% 88%
 Trefis Multi-Strategy Portfolio 1% 10% 247%

[1] Month-to-date and year-to-date as of 5/31/2023
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates