Barclays‘ (LSE: BARC) shares have been having a scary time, crashing 25% in less than two months after their February peak. That’s the kind of thing a series of escalating crises across the Middle East can do to a banking stock. Especially to one with the international exposure that Barclays has.

We might not be back at that peak yet. But the stock’s already been climbing nicely from the dip. And £10,000 in Barclays shares a year ago would actually be worth around £15,800 now. We can add something like £450 to that in dividends too.

But there might be a lot more to come if City forecasts are anything to go by. Let’s see if Barclays shares are still cheap.

What to expect

Analysts are certainly bullish about Barclays shares. There’s a pretty solid Buy consensus on the stock, with an average target price of 530p.

That’s around 20% ahead of where the price is at the time of writing. And it would be enough to turn a new £10,000 investment today into £12,000 — plus another bit of dividend cash. But what about continuing from that 10 grand a year ago?

If the price target should come good in the next 12 months, we could see the investment climb all the way to around £19,000. That would mean a 90% profit in two years or less. Yes, bank stocks can carry more risk than some others, but they can also be among the best cash cows around.

The next 12 months

Saying that, the coming year has to be one of the most politically uncertain I can remember for a long time. Any number of things could go wrong and send world economies plunging further. Interest rates, fears of loan risks… is there a chance we could soon be picking up the pieces of another financial crash?

I think there is. But I see it as small. And bank valuations look to me like they already allow for a fair bit of potential risk. But it does reinforce one thing: I’d never buy any stock, especially not something that can be as volatile as a bank, just with an eye on the next 12 months.

At Barclays, we’re looking at a forecast price-to-earnings (P/E) ratio of only around 8.5, which does sound like good value to me. And what’s more, forecasts out to 2028 would see rising earnings pushing that down to just a bit over six.

Educated guesswork

I’d rate a P/E of six or so for Barclays shares as screaming cheap — if it were now. The thing is, forecasts are really just educated guesses. And we know by painful experience what can go wrong with bank shares over a timescale of two or three years.

Some UK-focused banks are on attractive valuations too. And I might be more tempted to go for one of those in the hope of a bit more safety. But I really do think Barclays is worth considering for a long-term investment.