Barclays Set to Report Q1 Earnings: Here's What You Should Know

Barclays BCS is slated to announce first-quarter 2025 results tomorrow, before the opening bell. The company’s quarterly revenues and earnings are expected to have increased on a year-over-year basis.

In the last reported quarter, an increase in revenues, lower operating expenses and a solid balance sheet supported the results. However, the company recorded a rise in credit impairment charges in the quarter.
 

Barclays PLC Price and EPS Surprise

Barclays PLC price-eps-surprise | Barclays PLC Quote

The Zacks Consensus Estimate for the company’s earnings is pegged at 61 cents per share, which has moved 5.2% upward in the past seven days. This indicates a rise of 17.3% from the year-ago quarter’s reported number.

The consensus estimate for sales is pegged at $10.07 billion, implying 14.2% growth.

Major Factors Expected to Impact Barclays’ Q1 Results

Investment Banking (IB) Revenues: Global mergers and acquisitions (M&As) in the first quarter of 2025 were less impressive than previously expected. Deal value and volume rose marginally, mainly led by the Asia Pacific region. Ambiguity over the tariff policies and ensuing trade war resulted in extreme market volatility. These led to economic uncertainty, with data suggesting a slowdown in the U.S. economy and rising inflation. Against such a backdrop, companies started rethinking their M&A plans despite stabilizing rates and having significant investible capital. Thus, advisory fee growth is likely to have been marginal for BCS.

Further, the IPO market saw signs of cautious optimism, given the market volatility, geopolitical challenges and rising flotation costs. The equity market performance drove some decent activity in follow-up equity issuances. Yet, bond issuance volume was strong on solid investor demand and tighter spreads, but uncertainties persisted due to a tough macroeconomic environment. Thus, Barclays is expected to have witnessed decent growth in equity and debt underwriting fees.

Hence, growth in IB revenues is likely to have been modest in the to-be-reported quarter.

Trading Revenues: Client activity and market volatility were solid in the first quarter.  The likelihood of a trade war, sticky inflation and higher-for-longer interest rates alongside recessionary fears affected client activity. Further, volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange. 

Given the solid volatility and higher client activity, Barclays’ trading business performance is expected to have been robust.

Net Interest Income (NII): In the first quarter, the central banks globally exhibited a mixed approach to interest rate adjustments. This reflected divergent perspectives on the economic outlook, with some central banks prioritizing inflation control while others focused on potential economic downturn. Hence, these are likely to have resulted in the stabilization of funding costs for Barclays and a decent rise in loan demand.

Thus, BCS’ NII is expected to have improved in the to-be-reported quarter.

Expenses: Barclays’ cost control measures have been leading to improved efficiency and lower cost-to-income ratio. In the to-be-reported quarter, expenses are expected to have remained manageable as business restructuring initiatives offered support.

What the Zacks Model Unveils for Barclays

Our quantitative model does not conclusively predict an earnings beat for BCS. This is because it lacks the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for BCS is -0.83%.

Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Finance Stocks Worth Considering

Here are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:

The Earnings ESP for UBS Group AG UBS is +6.02%, and it carries a Zacks Rank #3 at present. The company is slated to report first-quarter 2025 results tomorrow. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Over the past 30 days, the Zacks Consensus Estimate for UBS’ quarterly earnings has been revised 7.7% upward to 42 cents per share.

Tradeweb Markets TW is also scheduled to release first-quarter 2025 numbers tomorrow. The company has an Earnings ESP of +0.04% and carries a Zacks Rank #3 at present.

Quarterly earnings estimates for TW have been revised 1.2% upward to 85 cents per share over the past month.

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This article originally published on Zacks Investment Research (zacks.com).

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