The Barclays (LSE:BARC) share price rose 78% last year. Clearly that’s a huge return. The stock’s actually up 214% over two years. I certainly wish I didn’t have to reduce my position when I bought my house two years ago.

Either way, it’s been an incredibly successful investment for me, with the majority of my holding picked up during the Silicon Valley Bank (SVB) fiasco.

So what’s the forecast for 2026? Could it happen again?

A dose of reality

Barclays trades around 11.3 times forward earnings with this figure falling to 9.2 times for 2026. That’s not expensive versus the wider index or technology stocks, but it’s more than twice the figures from two years ago.

While Barclays has delivered strong earnings growth, appreciation of the share price can largely be attributed to a re-rating. This occurs when market sentiment towards a stock changes and investors become willing to pay a higher price for what is essentially the same company.

It’s all about perception. Two years ago, investors worried about the state of the economy and impairment charges banks would incur. As a result, Barclays once traded under five times forward earnings.

That’s all changed. Investors seemingly believe banks are in the clear — the data largely supports this — and business is still booming as interest rates slowly moderate.

The issue however, is that a lot of the optimism is now priced in. It actually trades 4% above its price target. That means the consensus of analysts covering the stock points to a modest overvaluation.

Now there’s a caveat here. Analysts don’t update their coverage all that regularly. There could be some upgrades coming. Even if that’s the case, it’s easy to argue that Barclays’ shares are trading very near fair value.

There are other metrics to look at — plenty in fact — but they broadly support this notion of reaching fair value. The dividend yield is down near 1.7%. For context, it was at 5.4% when I bought most of my holding.

The price-to-book ratio now sits at 0.9 versus 0.4 during the SVB fiasco.

Momentum can be sustained… but not forever

One important lesson about the stock market is that it’s imperfect. That can be great if you want to find overlooked stocks that will surge when everyone else cottons on. But it also means that investors can pile into trades and make shares overvalued relative to their fair value. This is incredibly common and it means that momentum can be self-propelling.

Eventually, well normally eventually, the stock’s momentum gives way when investors realise fair value has been surpassed.

What I’m saying is that Barclays’ share could continue to rise because investors want a piece of a hot stock. In the end however, the market should bring it back to earth. Barclays may exceed fair value, but I’d like to think it will ground itself soon.

So £10,000 invested in Barclays shares could be worth how much in a year? Well, I’d suggest £10,800. Why’s that? Well, it’s close to fair value, but operational momentum (business performance) could provide a little boost or two on the way.

With that in mind, I still believe it’s worth considering for the long run. Just don’t expect any big short-term wins.