Barclays BCS shares touched a 52-week high of $21.13 on the NYSE in yesterday’s trading session, to finally close at $21.05. So far this year, the BCS stock has soared 58.4%, outperforming the industry’s growth of 38.2%. Moreover, the company has fared better than its peers HSBC Holdings HSBC and NatWest Group plc NWG. Year to date, HSBC shares have gained 40.4% and the NWG stock has rallied 44.6%.

YTD Price PerformanceZacks Investment Research

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Does the BCS stock have more upside left despite touching its 52-week high? Let us find out.

Factors Driving Barclays Stock

Business Streamlining Initiatives: Barclays has continuously been trying to simplify its operations and focus on core businesses. Last month, it agreed to sell its stake in Entercard Group to partner Swedbank AB for $273 million. In April 2025, it announced a collaboration with Brookfield to transform its payment acceptance business. In February 2025, BCS divested its Germany-based consumer finance business.

Last year, Barclays acquired Tesco’s retail banking business, which will complement its existing business and strengthen its position in the market. Also, it divested its Italian mortgage portfolio and sold $1.1 billion in credit card receivables to bolster the lending capacity for Barclays Bank Delaware in the United States.

In 2023, Barclays acquired Kensington Mortgage, which bolstered its mortgage business in the U.K. Driven by these initiatives, the company’s profitability is expected to improve over time.

Cost-Mitigating Efforts: Barclays’ initiatives to improve efficiency over the last few years have been bearing fruit, as evident from a fall in expenses. Total operating expenses increased in 2022, 2023 and the first half of 2025. However, the company recorded a negative compound annual growth rate of 2.4% over the six years ended 2021. Overall expenses are expected to remain manageable as business restructuring initiatives continue to provide support.

Barclays intends to undertake further cost-saving actions. In 2024, its structural cost actions resulted in gross savings of £1 billion. The company aims to achieve gross efficiency savings of £0.5 billion in 2025. By 2026-end, management expects total gross efficiency savings of £2 billion and the cost-to-income ratio to be in the high 50s.

Robust Capital Position: Despite the uncertain macroeconomic environment, Barclays’ capital position remains solid. The company has been rewarding shareholders with enhanced capital distributions. It has been paying out dividends regularly and plans to keep the total dividend payout stable at the 2023 level, with progressive dividend growth.

Moreover, Barclays plans to return at least £10 billion of capital to shareholders between 2024 and 2026 through dividends and share buybacks, with a continued preference for buybacks. Driven by a solid balance sheet position, the company’s sustainable capital distributions will likely enhance shareholder value.

Story Continues

What’s Hurting Barclays’ Growth

Muted Top-Line Growth: Barclays’ core operating performance remains unsatisfactory. Net interest income (NII), and net fee, commission and other income have been witnessing a volatile trend over the past several quarters due to a challenging operating backdrop. Though NII and net fee, commission, and other income rose in 2024 and the first six months of 2025 on the back of structural hedges and the Tesco bank buyout, the uncertainty about the performance of the capital markets may weigh on the company’s top line, which makes us apprehensive about its growth prospects.

Weak Asset Quality: Rising credit impairment charges remain a major concern for Barclays. The company witnessed a significant rise in credit impairment charges in 2020 to £4.8 billion, though there was a credit impairment release of £653 million in 2021. Nonetheless, the metric has been on the rise since 2022, with the uptrend continuing in the first half of 2025.

Because of the tough operating environment, credit impairment charges are expected to remain elevated in the near term.

How to Approach the BCS Stock Now?

Barclays' robust capital position, its business simplifying initiatives and cost-saving plans will continue to drive growth. Strong brand value and a global network are expected to act as tailwinds.

In terms of its valuation, the BCS stock appears inexpensive compared with the industry. Barclays is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 0.82X, which is below the industry’s 2.54X.

Price-to-Tangible Book Ratio (TTM)Zacks Investment Research

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Barclays’ stock is also inexpensive compared with HSBC and NWG. At present, HSBC has a P/TB (TTM) of 1.31X and NWG’s P/TB is 1.29X. 

However, the uncertainty regarding the performance of the capital markets business is concerning. A challenging macroeconomic environment is likely to exert pressure on top-line expansion and result in a persistent rise in credit impairment charges, making us apprehensive.

Moreover, analysts also do not seem very optimistic regarding the company’s earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for Barclays’ 2025 earnings has been unchanged.

Earnings EstimatesZacks Investment Research

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Thus, while the BCS stock is trading at a discount, investors should not rush to buy it now, given its not-so-impressive earnings outlook. Those who already own the stock in their portfolios can hold on to it because it is less likely to disappoint over the long term.

Currently, Barclays carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Barclays PLC (BCS):Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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