Goldman Sachs thinks that U.S.-traded shares of Barclays still have a long growth runway ahead, even after already beating the market so far in 2024. The firm initiated coverage of the banking stock with a buy rating and a 290 pence per share price target on Tuesday. Goldman’s forecast implies more than 26% upside from Monday’s 229.65 pence close. Barclays’ sponsored American Depositary Receipts have jumped 54% in 2024 compared with a 20% gain for the S & P 500, according to FactSet data. Goldman analyst Chris Hallam forecasts that Barclays could grow its earnings per share twice as fast as peer firms through 2027, while a steep discount on the stock gives investors an attractive entry point. The analyst attributes part of his outlook on Barclays stock to a planned strategic rebalance that could help stoke growth, as well as its strong global presence, particularly in the U.S. BCS .SPX YTD mountain Barclays’ ADRs in 2024 vs the S & P 500. “”The Investment Bank [portion of Barclays’ business] is at-scale but currently under-earning,” Hallam said. “We expect returns to improve through capital reallocation (as discipline) and a cyclical recovery.” Hallam noted Barclays stock currently trades at roughly six times its 12-month forward price-to-earnings ratio, compared to the wider group of banks covered by Goldman that trade at seven times forward P/E. “Barclays’ inexpensive valuation provides a highly attractive entry opportunity in our view, particularly as we see upside risk to consensus earnings estimates over the coming years,” the analyst added.
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