Barclays Shares Surge 68.4% YTD: How to Play the Stock Now

Core Insights - Barclays (BCS) shares have increased by 68.4% year-to-date, outperforming the industry growth of 45.5% and surpassing peers like HSBC (42.7%) and NatWest (61.1%) [1][9]. Factors Driving Barclays Stock - Business Streamlining Initiatives: Barclays is focusing on core operations, selling its stake in Entercard Group for $273 million and acquiring a U.S. credit card portfolio worth $1.6 billion [5][6]. - Cost-Mitigation Efforts: The company achieved gross savings of £1 billion in 2024 and expects total gross efficiency savings of £2 billion by the end of 2026 [8]. - Robust Capital Position: Barclays maintains a solid capital position, planning to return at least £10 billion to shareholders from 2024 to 2026, with a preference for buybacks [11][9]. Roadblocks in Barclays' Growth Path - Subdued Top-Line Growth: Core operating performance remains unsatisfactory, with net interest income and other income showing volatility due to a challenging environment [12]. - Weak Asset Quality: Rising credit impairment charges are a concern, with significant increases noted since 2022 [13]. Valuation and Market Position - BCS stock appears inexpensive, trading at a price-to-tangible book (P/TB) ratio of 0.85X, below the industry average of 2.77X and lower than peers HSBC (1.23X) and NatWest (1.41X) [14][16]. - Analysts have revised earnings estimates downward for 2025 and 2026, indicating a cautious outlook despite the stock's current discount [17][20].