Barclays share price forecast ahead of Q4, full-year earnings

Barclays (LON: BARC) share price held quite well on Tuesday as investors waited for the company’s Q4 and full-year earnings. The market is also waiting for the upcoming UK consumer inflation numbers scheduled for Wednesday. It was trading at 187p, a few points below the year-to-date high of 193.12p.

Barclays Q4 earnings preview

The most important bank news this week will be the upcoming earnings by the biggest UK banks. Barclays will publish its Q4 and full-year results on Wednesday, a few weeks after its American counterparts delivered their results.

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The company has a close resemblance to Wall Street titans like JP Morgan and Bank of America. Like these firms, it has a large investment bank that provides high-level finance advisory like M&A. In addition, Barclays has a sprawling trading organization that makes money across all asset classes.

Therefore, judging by Wall Street banks, there is a possibility that its investment banking division will publish weak earnings. These results will then be offset by the strong performance of its lending business, which will be helped by high-interest rates.

Banks like Barclays that lend billions of pounds make money when interest rates are rising. That’s because higher rates lead to a wider net interest rate margin. And with unemployment rate low in its core markets, the company will likely announce minimal provisions.

Barclays published the latest analysts’ forecasts earlier this month. The consensus view is that the company’s total income came in at over 6 billion pounds in Q4 and 25.2 billion for the full year. The closely watched profit before tax (PBT) is expected to come in at 1.49 billion pounds and 7.19 billion, respectively. 

Barclays share price will also react to January’s UK inflation numbers that will come out on Wednesday. These numbers will help the Bank of England as it determines whether to hike or pause on interest rate increases.

Barclays share price forecast

BARC stock price has been cruising in after it bottomed at 131.94p in October. This rally culminated in the stock flipping the resistance at 176.02p into support on January 12. It has recently lost the bullish momentum when it approached the 61.8% retracement level. 

Barclays also formed a golden cross pattern on January 10, as I noted here. In trend-following, the stock is supported by the 50-day and 200-day moving averages. Therefore, I suspect that the bullish momentum will continue in the coming days after earnings.