Barclays PLC, a prominent U.K. banking institution, is encountering substantial challenges as Qatar Investment Authority (QIA), its second-largest shareholder, embarked on a substantial sell-off of shares valued at £510 million. This sale of 362 million shares, among the largest to date, signifies a notable reduction in QIA’s ownership from 5.3% to 2.9%, indicating a diminishing confidence in Barclays’ future trajectory.
This development arrives on the heels of Barclays’ recent disclosure concerning cost reductions amounting to £1 billion and the imminent slashing of 2,000 jobs. Additionally, the bank is contemplating a significant reduction in its investment banking clientele while prioritizing more lucrative business segments. QIA, instrumental in rescuing Barclays from the 2008 financial crisis, played a crucial role by infusing funds that helped the bank avert a government bailout. Despite the recent share divestment, QIA retains its position as the second-largest shareholder.
CEO C. S. Venkatakrishnan, widely known as Venkat, spearheads strategic initiatives aimed at revitalizing the bank’s past glory and bolstering its share price performance. Venkat is anticipated to unveil an extensive restructuring plan for Barclays during its Fiscal 2023 results presentation scheduled for February 2024. Faced with mounting challenges, Barclays has witnessed an 8.3% decline in its share price performance year-to-date.
Analysts, including Morgan Stanley’s Alvaro Serrano, have shown optimism by raising Barclays’ stock price target to 235p, signifying a potential upside of 64.3% from its current valuation of 143.10p. Serrano reaffirmed a Buy rating for the stock.
The consensus among market analysts, according to TipRanks, leans toward a Moderate Buy rating for BARC stock, comprising nine Buy recommendations, one Hold, and one Sell rating. The Barclays share price forecast of 211.00p indicates a potential increase of 47.6% from its current trading levels.