U.K. banking giant Barclays PLC (GB:BARC) is in trouble as its second-largest shareholder, Qatar Investment Authority (QIA), initiated the sale of shares worth £510 million yesterday. The sale of 362 million shares, one of the largest to date, will reduce QIA’s stake to 2.9% from 5.3%. The Saudi investment firm is steadily reducing its stake in Barclays, a sign of diminishing confidence in the company’s future.
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Barclays Under Pressure
The news follows a recent announcement about cost cuts of £1 billion and a workforce reduction of 2,000 jobs. Moreover, Barclays is mulling reducing thousands of clientele from investment banking and focusing on more productive units. The sovereign wealth fund was instrumental in rescuing Barclays from the 2008 financial crisis. With the help of QIA’s fund infusion, Barclays could stave off a government bailout. Even after the latest share sale, QIA remains the second largest shareholder.
Barclays CEO C. S. Venkatakrishnan (Venkat) is leading strategic efforts to reinstate the bank’s former glory and improve its share price performance. Venkat is expected to reveal a massive overhaul plan for the bank during its Fiscal 2023 results, due in February 2024. Owing to the mounting pressures, Barclays’ share price has fallen 8.3% so far this year.
Is Barclays a Buy or Sell?
Recently, Morgan Stanley analyst Alvaro Serrano raised the price target on Barclays stock to 235p (64.3% upside potential) from 230p, while reiterating a Buy rating.
Overall, with nine Buys, one Hold, and one Sell rating, BARC stock has a Moderate Buy consensus rating on TipRanks. The Barclays share price forecast of 211.00p implies 47.6% upside potential from current levels.
