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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Is Barclays worth 142p a share?

Down 41% since the beginning of the year at 105.9p today, could Barclays share price recover from the market crash of March and reach a 142p target?

Barclays share Source: Bloomberg
  • Barclays stock price has been hit very hard by the pandemic crisis, dropping 41% to 105.9p
  • S&P Global Market Intelligence’s consensus is targeting a 25% share price rise
  • Retail revenues are expecting to rise in S2, but ‘significant risks’ remain on the banking industry

Slashed by the Coronavirus crisis, Barclays stock lost more than 41% year-to-date. Falling from 180p in January 2020 to around an 80p low at the beginning of April, Barclays share price managed to recover some of its loss this summer. It closed at 105.9p today on the FTSE 100.

S&P Global Market Intelligence’s pool of analysts has a consensus “accumulate” rating on the Barclays stock with an average target price of 142.68p, about 25% above its current price.

But is the Barclays share price really able to meet these expectations considering the coronavirus headwinds and the lack of certitudes about the economic rebound?

Optimistic momentum on Barclays’ second semester are supporting a 142p target price

The first half of 2020 has been quite a hard time for Barclays, as it has the rest of the banking industry. With the pandemic crisis the UK bank’s earnings results of S1 saw a 66% drop in profits to £695 million. However, its corporate and investment activities - 31% year-over-year at £6.9 billion - managed to repair part of the damage.

Trefis analysts believe that the British Bank can rise significantly in the upcoming months, expecting that Barclays will show some good signs of improvement, led by a progressive recovery of the economy.

According to Trefis, the easing of lockdown restrictions in most parts of the world will support consumer demand and increase significantly Barclays’ retail revenues. On the other hand, its trading revenues are expecting to go down after an exceptional 63% growth in S1, as a lot of new traders came into the market during this period of high volatility.

For the whole year of 2020, Trefis anticipates Barclays to report £21 billion in revenues – similar to their 2019 results.

If the company manages to keep its revenues on track on a recession-year, there is little doubt that Barclays share price can reach the 142p target within the next 12-months: price goal appears reasonable, as it is around 20% under the pre-crisis Barclays price share at 180p.

Could market and pandemic risks prevent Barclays share price reaching 142p?

Even if the odds are goods that Barclays will record profits recovery in Q3 and Q4, risks remains to the downside when it comes to the banking sector in stock markets.

In the first half of 2020, to fight against the pandemic consequences the company already set aside £3.7 billion as provisions for bad loans, which increased significantly the cost of its operation.

Should the economic rebound be not as strong as expected, Barclays – as its competitors – could increase its provisions to hedge loan defaults risk. And that could weight on its share price.

Robert Noble, analyst at Deutsche Bank, said to Interactive Investor that ‘significant risks remain’ on UK banks. Barclays could yet tumble as some government support measures will come to an end, or if Europe will experience a second wave of coronavirus.

Noble’s target price for Barclays, at 135p, is thereby lower than S&P Global Market’s consensus.

How to trade Barclay stocks with IG

Looking to trade Barclays and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Barclays’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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