Barclays Share Price Falls On Profit-Taking After Earnings Results

Summary:
• Despite its profit rising by 24% on a yearly basis, Barclays Bank share price have fallen as investors sell after a strong run.

Barclays share price dropped sharply as investors sold their assets in reaction to unsurprising earnings results for the quarter ended December 2024. The stock was down by 5.75% and traded at GBX 291.40 at the time of writing. It rose to record highs of GBX 312.40 on Wednesday in anticipation of the earnings results. Today’s decline is hardly a surprise, as investors were bound to take profit after a strong show in 2024.

The bank reported pre-tax profit of £1.66 billion for the quarter, with full-year pre-tax profit up by 24% to £8.1 billion. The quarterly profit beat consensus estimates of £1.62 billion, injecting an underlying bullish momentum in Barclays share price. Also, the bank announced a £1 billion share buy back program.

This year may prove challenging for the bank’s net interest income (NII), if the Bank of England continues with its interest rate cuts. Barclays (LON: BARC) generated £11.2 billion in NII last year, thanks to a high interest rate ecosystem. Nonetheless, the bank is upbeat and forecasts its NII to rise to £12.2 billion in 2025.

Barclays also managed to reduce operating expenses by 1% in 2024 and announced dividend of GBX 9 per share. Its acquisition of Tesco’s retail bank helped drive up income by 9%.

Meanwhile, Barclays has extended the tenure of Group chairman Nigel Higgins by three years. In addition, it has raised his salary by 8% to £925,000. This is likely to ensure stability in the management of the Group and adds support to Barclays share price.

The factors above portray Barclays in a strong position, and I expect the share price to return to the upside in the near-term after the disruption caused by profit-taking.

Barclays Share Price Prediction

Barclays share price momentum signals the continuation of the downward trajectory below the pivot level at GBX 293.75. The stock will likely find the first support at GBX 287.75 However, an extended control by the sellers will break below that level and potentially test GBX 282.95.

Conversely, breaking above GBX 293.75 will shift the momentum to the upside. If that happens, BARC price is likely to move to the first resistance at GBX 300. The downside narrative will be invalid if the price breaks above that level. Also, a stronger momentum could extend gains and test GBX 305.35.