Barclays PLC has witnessed a significant downturn in its share price over the past eight years, failing to achieve the ambitious targets set by former Chairman John McFarlane. In July 2015, when Antony Jenkins was ousted from his CEO position, McFarlane aimed to double the bank’s share price within three to four years. However, under the leadership of current CEO CS Venkatakrishnan, Barclays’ shares have instead dwindled, falling from 285p to 136p.
The bank’s transatlantic business has notably underperformed, prompting concerns among investors. Despite this challenge, Venkatakrishnan has outlined plans to expand into other sectors such as credit cards and wealth management, departing from the previous strategy of shrinking the investment bank—a move that has sparked contention among investors who perceive inconsistent performance and a lack of clear strategic direction.
Investor apprehension is now directed toward the upcoming strategic review scheduled for February. There are concerns that the review may not adequately address issues related to the dominance of the investment banking division within Barclays. If the new strategic model fails to convince stakeholders, it could potentially intensify calls for a breakup of the bank. This sentiment reflects growing investor frustration and the critical juncture at which Barclays currently stands.
InvestingPro Insights
As per real-time data from InvestingPro, Barclays PLC (BARC) boasts a market capitalization of $25.3 billion as of Q3 2023. The company’s P/E ratio is 3.94, indicating a low price relative to earnings. In Q3 2023, Barclays reported a revenue growth of 0.55%, with a quarterly revenue growth of 4.58%.
InvestingPro Tips emphasize that Barclays has raised its dividend for three consecutive years, signaling a commitment to returning capital to shareholders. The bank is trading at a low Price/Book multiple, offering potential value for investors. Despite some analysts revising earnings downward for the upcoming period, Barclays remains a prominent player in the banking industry, with predictions of profitability this year.
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