Among the famous UK stocks, Lloyds Banking Group PLC (GB:LLOY) has received a Moderate Buy rating from analysts, who are predicting a further upside of 10% in the stock. The Lloyds share price has surged 14% in the first half of 2024, and investors and analysts are positive about a strong year-end finish.
Lloyds Banking Group is one of the UK’s oldest and largest banks, providing a wide range of financial services.
Lloyds Banking: Bulls vs. Bears
According to TipRanks’ Bulls Say, Bears Say feature, analysts are optimistic that increased cash generation will drive dividend growth and additional buybacks, serving as a catalyst for the share price. Additionally, management remains confident about improvement in margins. They believe that the analysts’ consensus estimates are underestimating contributions from hedging, other income, and operating leverage.
On the flip side, higher costs and a falling net interest margin remain concern areas for analysts. In the first quarter, Lloyds reported a 10% year-over-year decrease in its underlying net interest income of £3.2 billion. In Q1 2024, the net interest margin fell to 2.95% from 3.2% in the same quarter last year. The bank reaffirmed its expectation for the margin to surpass 2.90% for the full year, compared to the current consensus estimate of 2.93%.
Recent Analysts’ Ratings
On Friday, analyst Alvaro Serrano from Morgan Stanley reiterated a Buy rating on the stock, predicting an upside of 24%. Serrano has a price target of 68p for Lloyds stock.
Prior to that, RBC Capital analyst Benjamin Toms also confirmed a Buy rating on the stock, with a modest growth rate of 9.3%.
As per TipRanks, Toms is a five-star analyst. TipRanks tracks the performance of numerous financial experts, evaluating them based on their success rate, average returns, and statistical significance. Over the last year, Toms has achieved a 74% success rate, making him the most accurate analyst for Rolls-Royce stock.
Lloyds’ Business Banking Update
Last week, Lloyds released an investor presentation for its Business and Commercial banking division. The bank stated that it is eyeing an additional £300 million in annual revenues by 2026, as business confidence improves in the UK. This will contribute around 20% to the total target of £1.5 billion of additional revenues annually by 2026.
This improvement has been attributed to increased cross-selling of products to customers and the digitization of services.
Is Lloyds Stock a Good Buy Now?
According to TipRanks’ analyst consensus, LLOY stock has a Moderate Buy rating based on 11 recommendations, of which eight are Buy. The Lloyds share price target is 60p, which reflects 9.29% upside potential in the share price.
