Barclays shares are down 18%. Time to consider buying?

Barclays’ (LSE: BARC) shares have experienced a dramatic fall in recent weeks. Currently, the bank’s share price is sitting at 415p – about 18% below the 2026 high set in early February.

Is there a buying opportunity to consider here? Let’s discuss.

What’s changed?

When I covered Barclays shares in mid-January, I was quite bullish on the bank stock. I thought it may benefit from a broadening out of the market in 2026 (investors moving from tech into other sectors).

At the time, Barclays had a lot going for it. The interest rate set-up looked attractive and there were several other growth drivers for the bank to capitalise on.

However since then, quite a bit has changed. For a start, the bank had exposure to collapsed mortgage lender Market Financial Solutions (MFS).

It failed in February amid serious fraud allegations. Barclays reportedly had £500m-£600m tied to the firm.

Secondly, the conflict in Iran has created some economic uncertainty. With oil prices surging, investors are worried about inflation and the risk of an economic downturn.And that could hit the banks. These institutions are very cyclical.

Finally, in recent weeks, there’s been talk that artificial intelligence (AI) could wipe out a lot of white-collar jobs in the years ahead. This could have serious implications for banks like Barclays.

Because if a multitude of people lose their jobs to AI, mortgage defaults will almost certainly spike. Of course, we don’t know if this scenario will actually play out. Regardless of whether it does or doesn’t, it could impact sentiment towards the banks.

An opportunity today?

Put all this together, and the landscape’s quite different to the one at the start of the year. Personally, I’m not as bullish as I was.

That said, there’s still a lot to like about the stock. The stock market and commodity volatility we’re seeing at the moment should be good for Barclays. It has a trading division so it should be able to capitalise on this.

High equity markets are another positive. Fees from its wealth management division should continue to be strong.

Meanwhile, despite a slow start, 2026 could still be a good year for initial public offerings (IPOs) and capital markets activity. So its investment banking division could still do well.

As for the valuation, it’s quite low. If we take the consensus earnings per share forecast for 2026 of 53.4p, we get a price-to-earnings (P/E) ratio of 7.8.

That’s attractive. Of course, there’s no guarantee the earnings figure will be accurate given the issues mentioned above.

Turning to the dividend yield, it sits at around 3.3%. So there appears to be a decent level of income on offer right now.

Given all these positives, I believe the shares are worth considering at current levels. However, there are plenty of other opportunities in the market that could be worth exploring as well.

The post Barclays shares are down 18%. Time to consider buying? appeared first on The Motley Fool UK.

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Edward Sheldon has no positions in any 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.

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