Barclays (LSE:BARC) shares are currently changing hands (June 1) for about a tenth less than they were at the beginning of February. However, over the last three months, the bank’s share prices have been at a clearly average level. Of all the shares on FTSE100ranks 50th in this period.

But what really matters is the future. Does this make the decline in share prices a great opportunity for further research? Let’s see.

Underrated and underappreciated?

Looking at the table of price-to-earnings ratios of the five largest British banks, Barclays comes in second place.

Based on its price-to-book (P/B) ratio, it appears to be the cheapest bank in the FTSE 100. In fact, it is the only bank with a P/B ratio below one. In theory, this means that the sum of its parts (assets minus liabilities) is greater than its current market capitalization.

I suspect this can be partly attributed to the business model. It generates a significant part of its income from the investment part. In this case, returns may be uneven due to the unpredictable nature of the stock market. The return on material capital (RoTE) is also lower.

Generally speaking, investors attribute a higher multiple to more stable earnings. I think that’s why Lloyds Banking Groupwith its enormous mortgage portfolio and focus on core banking, it is valued higher.

Going in the right direction

But for now, let’s ignore Barclays’ valuation relative to its peers and look at its own performance over the past two years. Encouragingly, this shows an upward trend in both revenue and profits.

In 2025, the Bank achieved all key financial goals. It is worth noting that earnings per share increased by 21.6% year over year.

It also achieved a RoTE of 11.3% compared to 10.5% in 2024. This gave bank executives the confidence to announce a 2028 RoTE target of “greater than 14%They also presented payment plans to shareholders (dividends and buy-backs) for 2026-2028 in the amount of GBP 15 billion.

Barclays believes that savings achieved through the widespread adoption of artificial intelligence solutions will be a major driver of anticipated future increased profitability.

Despite such impressive results, one area worth paying attention to is the level of loan defaults. Barclays has set aside £823 million to cover potential losses in the first quarter of 2026. This is 54% more than in the previous quarter. It’s a reminder that it is vulnerable to a broader economic slowdown, particularly in the UK and US, where it does most of its business.

Still, analysts have a 12-month price target that is 20% higher than the current share price. Of the 18 equity firms, none advise their clients to sell.

Final thoughts

I already own Barclays shares. In fact, it’s the only British bank I own. But I wouldn’t describe these stocks as being in bargain territory. In my opinion, there are many other FTSE 100 shares offering better value. Instead, I would characterize the bank’s stock as moderately undervalued.

This means that investors looking for an entry point into the sector at a price much lower than it was just before the outbreak of war in the Middle East could consider adding this stock to their portfolio.

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James Beard owns shares of Barclays.