By February 2027, £1,000 invested in Barclays shares could be worth…
Through a combination of strategic positioning and a more favourable interest rate environment, Barclays (LSE:BARC) shares have been on a bit of a rampage of late. Despite being one of the largest and most mature banks in Britain, shareholders have earned a market-beating 57% total return over the last 12 months.
In terms of money, that means a £1,000 initial investment is now worth around £1,570. But the question now is, can Barclays do it again in 2026?
What are the experts saying?
Double-digit forecasts
Even with interest rates now sitting at 3.75% versus a high of 5.25% back in 2024, Barclaysâ net interest margin has continued to rise. In fact, as of September 2025, the profitability of the bankâs lending business stands at an impressive 4.55%. Thatâs up from 4.21% year on year, and is among the highest in the sector.
Barclays has proven exceptionally skilled at setting up interest hedges, allowing it to continue benefitting from previous higher interest rates for longer, even after the Bank of Englandâs cuts.
Yet at the same time, its investment banking arm is also delivering impressive results. And as a consequence, the firmâs overall return on tangible equity (RoTE) during its third quarter stood at a solid 10.6% with group income climbing 9% to £7.2bn.
Combined with earlier performance throughout 2025, the continued strong performance has put the bank stock on track to deliver a full-year RoTE of over 11%. And with further expansion of net interest margins expected in the near term, the analysts at both Deutsche Bank and JP Morgan have put their share price targets at 570p.
If these projections prove to be accurate, then looking at where Barclays shares trade today, that indicates a potential gain of 22.2% — enough to turn £1,000 into £1,222 over the next 12 months.
What to watch
While a 22% return isnât as explosive as 57%, itâs still nothing to scoff at. After all, the UK stock market average is just 8%. However, itâs important to remember that, like all forecasts, nothing is set in stone. And even bullish institutional investors have flagged some notable risks surrounding this FTSE stock.
While still relatively small, the latest quarter saw a further increase in credit impairment changes, climbing from around £400m to £600m year on year.
Due to wider weakness creeping into both the UK and US economies, a small but growing number of customers are struggling to keep up with their loan repayments.
As things stand, the situation is still easily manageable. However, that might quickly change if a recession comes knocking later this year or in 2027. And after such a strong rally, this might trigger some profit-taking activity from investors, dragging Barclays shares down instead of up.
The bottom line
As a business, Barclays is still very much in the game. Its loan book is enormous, backed by a giant pile of deposits and impressive lending margins.
However, this quality hasnât gone unnoticed. And while the price-to-earnings ratio looks relatively cheap at just 12.5, thatâs actually ahead of the wider sector average of 11.4, suggesting that current growth expectations may actually already be priced in despite the optimistic forecasts from some institutional investors.
Thatâs why I think there are likely better opportunities to explore within the UK financial sector. Luckily, investors are spoilt for choice.
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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
