Barclays (LSE:BARC) shares have climbed nearly 30% over the last 12 months, and that hasn’t happened by accident. Investors have been encouraged by a better earnings picture, stronger returns, and a management team that now sounds more confident about the road ahead.

But the question now is, what happens next? Can this momentum continue? Or are there major risks lurking below the surface?

What the experts see

The latest institutional view is still fairly upbeat.

In March, Barclays reported a 6% rise in group income £8.2bn and previous raised its key return on tangible equity target to above 14% by 2028, up from previous guidance of more than 12% by 2026.

The bank also announced its plans to return more than £15bn to shareholders between 2026 and 2028. That’s a strong signal. And it suggests that management expects its current solid performance to continue into the coming years.

It’s an opinion seemingly shared by many experts, given that 15 out of 18 institutional analysts currently recommend the stock as a Buy or Outperform. And this bullish sentiment isn’t unjustified.

After all, the business has already exceeded its own profit and efficiency targets ahead of schedule. And if Barclays keeps lifting returns, growing profits, and returning cash, the stock could indeed be a solid investment today. But that might be harder to deliver than it sounds…

The hidden risk

In my opinion, the bear case surrounding Barclays is less about whether it can keep improving but rather more about how long that improvement can last.

Reuters noted earlier this year that the bank’s plan is to focus on its core UK and US markets while using AI and technology to cut costs. That sounds good at first glance, but it also highlights the core challenge.

If the next leg of growth depends on cost-cutting and a stable banking backdrop, then an external economic slowdown could take a lot of Barclays’ shine away. And with economic concerns already creeping into both the UK and US economies, a slowdown might not be far off, especially with the expected energy and food inflation courtesy of the Iran war.

Put simply, the easy money might have already been made, with a tougher road ahead that could leave some investors disappointed.

What matters now

For me, the real question is not whether Barclays has improved – it clearly has. But rather it’s about whether the bank can maintain its recent outperformance in the years ahead. Management appears to be confident, and its ambitions don’t appear to be too optimistic.

So, for investors looking for exposure to the banking sector and who are comfortable with the macroeconomic risk, Barclays shares could be worth mulling over. But for my portfolio, I’ve also spotted other promising opportunities in the financial sector.

Should you invest £5,000 in Barclays Plc right now?

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Zaven Boyrazian does not hold any positions in the companies mentioned.