Barclays (BCS) AI Stock Analysis

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Barclays

(NYSE:BCS)

81Outperform

Barclays' strong financial health and attractive valuation are key factors driving its high score. The positive earnings call further supports confidence in its strategic execution and growth potential. However, past cash flow volatility and challenges in the investment bank performance introduce some uncertainty.

Barclays (BCS) vs. S&P 500 (SPY)

Market Cap

$48.20B

Dividend Yield3.06%

Average Volume (3M)18.25M

Price to Earnings (P/E)7.6

Beta (1Y)1.31

Revenue Growth8.58%

EPS Growth35.39%

CountryUS

Employees93,000

SectorFinancial

Sector Strength86

IndustryBanks - Diversified

Share Statistics

EPS (TTM)1.84

Shares Outstanding3,575,952,000

10 Day Avg. Volume19,413,791

30 Day Avg. Volume18,249,127

Financial Highlights & Ratios

PEG Ratio0.21

Price to Book (P/B)N/A

Price to Sales (P/S)1.73

Price to Cash Flow (P/CF)-0.70

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusModerate Buy

Number of Analyst Covering2

Barclays Business Overview & Revenue Model

Company DescriptionBarclays (BCS) is a British multinational universal bank, headquartered in London, United Kingdom. It operates through two primary business divisions: Barclays UK and Barclays International, supported by its service company, Barclays Execution Services. The company offers a wide range of financial products and services, including retail banking, credit cards, corporate and investment banking, and wealth management. With a significant presence in both global and local markets, Barclays serves millions of customers worldwide, providing solutions tailored to individual and business needs.

How the Company Makes MoneyBarclays generates revenue through several key streams. Its retail banking division earns income from interest on loans and mortgages, as well as fees from account services and transactions. The credit card segment contributes through interest charges on outstanding balances and interchange fees from merchants. The corporate and investment banking division is a major revenue driver, earning from advisory services, underwriting, trading activities, and market-making. Additionally, wealth management services provide fees from asset management and advisory services. Significant partnerships with other financial entities and technological investments also enhance Barclays' ability to offer competitive services, contributing to its earnings.

Barclays Financial Statement Overview

Summary

Barclays has demonstrated strong financial health with notable revenue growth and profitability, a stable balance sheet with zero debt, and improved cash flows. However, there are concerns regarding the absence of EBIT margins and past cash flow volatility.

Income Statement

Positive

Barclays has shown a consistent revenue growth with the latest annual revenue increasing from 23.5B to 26.2B, a 11.3% growth. The net profit margin for the latest year is approximately 24.0%, indicating strong profitability. However, EBIT margin figures are absent for the latest period, limiting a full assessment of operational efficiency.

Balance Sheet

Positive

The balance sheet shows strong equity with a debt-to-equity ratio of 0, indicating no debt and excellent financial stability. The return on equity stands at 8.8%, reflecting decent profitability on shareholder investments. The equity ratio of 4.7% suggests a moderate level of equity financing compared to total assets.

Cash Flow

Positive

Barclays' free cash flow significantly improved from -2.6B to 5.5B, showcasing robust cash generation capabilities. The operating cash flow to net income ratio is approximately 1.1, indicating that the company efficiently converts its income into cash. However, the negative free cash flow in the previous period highlights potential volatility.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
25.42B	26.23B	23.50B	24.96B	21.94B	21.77B
	Gross Profit
25.42B	26.23B	51.34B	24.96B	21.94B	21.77B
	EBIT
257.00M	0.00	7.42B	15.49B	8.37B	2.99B
	EBITDA
-916.00M	0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
5.00B	6.31B	5.26B	5.93B	7.01B	2.38B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
51.80B	210.18B	220.88B	256.35B	238.57B	191.13B
	Total Assets
1.25T	1.52T	1.48T	1.51T	1.38T	1.35T
	Total Debt
85.18B	0.00	176.65B	124.30B	111.63B	92.14B
	Net Debt
33.39B	-210.18B	-224.63B	-132.05B	-126.95B	-98.99B
	Total Liabilities
1.18T	1.45T	1.41T	1.44T	111.63B	92.14B
	Stockholders Equity
62.17B	71.82B	71.20B	68.29B	69.22B	65.80B
Cash Flow		Free Cash Flow
0.00	5.54B	-2.65B	28.48B	47.20B	56.18B
	Operating Cash Flow
0.00	7.11B	-927.00M	30.23B	48.92B	57.51B
	Investing Cash Flow
0.00	-17.89B	-23.41B	-21.67B	4.27B	-18.38B
	Financing Cash Flow
0.00	784.00M	-8.35B	696.00M	107.00M	2.73B

Barclays Technical Analysis

Technical Analysis Sentiment

Negative

Last Price13.94

Price Trends

50DMA

15.08

Negative

100DMA

14.20

Negative

200DMA

12.96

Positive

Market Momentum

MACD

0.13

Positive

RSI

48.18

Neutral

STOCH

21.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BCS, the sentiment is Negative. The current price of 13.94 is below the 20-day moving average (MA) of 15.00, below the 50-day MA of 15.08, and above the 200-day MA of 12.96, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 48.18 is Neutral, neither overbought nor oversold. The STOCH value of 21.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BCS.

Barclays Risk Analysis

Barclays disclosed 18 risk factors in its most recent earnings report. Barclays reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Barclays Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSBC	81 Outperform	$171.96B	7.99	13.74%	6.57%	6.79%	8.57%
BCS	81 Outperform	$48.20B	7.57	9.14%	3.06%	8.58%	35.39%
NWG	77 Outperform	$45.44B	8.49	13.34%	4.61%	18.85%	14.85%
SAN	76 Outperform	$96.00B	7.71	13.16%	2.33%	6.56%	19.02%
ING	75 Outperform	$55.76B	8.51	12.75%	5.58%	4.07%	9.97%
C	65 Neutral	$116.02B	10.37	6.04%	3.58%	8.20%	49.26%
Sector *	64 Neutral	$13.37B	9.30	9.39%	4.85%	16.11%	-8.85%

* Financial Sector Average

Performance Comparison

BCS

Barclays

13.94

5.05

56.81%

Citigroup

61.64

5.04

8.90%

HSBC

HSBC Holdings

49.89

12.71

34.19%

ING

ING Groep

18.22

3.47

23.53%

NWG

NatWest Group

11.61

5.05

76.98%

SAN

Banco Santander SA

6.43

1.93

42.89%

Barclays Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -7.87% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call reflects a generally positive sentiment with Barclays achieving key financial and strategic targets for 2024, showing strong credit performance, and making significant progress in high-return divisions. However, challenges remain in improving investment bank returns and managing regulatory and inflationary pressures.

Highlights

Successful Execution of Financial Targets

Barclays achieved all of its financial targets for 2024, including a return on tangible equity of 10.5%, a £3 billion capital distribution, and a cost-to-income ratio of 62%.

Growth in High-Return Divisions

Barclays U.K. delivered a 23% return on tangible equity, and the acquisition of Tesco Bank is expected to leverage new strategic relationships and customer growth.

Strong Credit Performance

The group reported a loan loss rate of 46 basis points for the year, below the target range of 50 to 60 basis points, indicating robust credit management.

Positive Revenue Growth

Group income grew by £1.4 billion or 6% year-on-year during 2024, supported by structural hedge benefits and balance sheet growth.

Improvement in the U.S. Consumer Bank

The U.S. consumer bank's return on tangible equity improved to 9% from 4%, driven by normalized impairment charges and operational enhancements.

Lowlights

Challenges in Investment Bank Performance

Despite some progress, the investment bank's return on tangible equity was 8.5%, with a need for further improvement to reach the target of greater than 12% by 2026.

Impact of Regulatory Changes

Barclays continues to face uncertainties related to regulatory-driven RWA inflation, expected between £19 billion and £26 billion.

Cost Pressures and Inflation

The bank expects increased inflationary pressures in 2025, impacting costs despite planned efficiency savings.

Company Guidance

During the Full-Year 2024 Results and Progress Update, Barclays provided detailed guidance on various financial metrics. They achieved a return on tangible equity (RoTE) of 10.5%, meeting their target of greater than 10%. The bank announced £3 billion in capital distributions, including £1.2 billion in dividends, which facilitated a 5% increase in dividends per share to 8.4p, and £1.75 billion in buybacks, with £1 billion announced and expected to be initiated shortly. Barclays reported a top-line growth of £1.4 billion or 6% year-on-year, with a cost-to-income ratio of 62%, better than their guidance of approximately 63%. Their loan loss rate of 46 basis points was below the targeted range of 50 to 60 basis points. Efficiency initiatives resulted in £300 million in gross savings in Q4, achieving the £1 billion target for 2024. Barclays U.K. delivered a RoTE of 23%, while the Investment Bank improved RoTE from 7% to 8.5%. The U.S. consumer bank saw improved returns, with RoTE increasing to 9% from 4%. The bank remains focused on executing its three-year plan to achieve a RoTE greater than 12% by 2026, with a target of distributing at least £10 billion to shareholders over the plan's duration.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.