This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Banks p2
Lloyds Banking Group (LLOY)
Lloyds Banking Group (LLOY) has seen its shares trade down on recent sector weakness, with matters made worse by the UK government cancelling the sale of its remaining circa 10% stake after the price fell below its 73.6p breakeven price. Further fears of yet another mammoth £2bn provision for PPI mis-selling have compounded matters, sending the share price towards the current most bearish 12-month target price of 55p.
Note that those who were looking to take advantage of the share offer are now seeing shares costing less than they would have done even with the 5% discount (since the minimum price at which the government will sell is 73p). There is also no limit on position size, as there would be with the government’s offer.
Will shares fall back towards recent 55p lows or recover towards 89p highs?
Broker Consensus: 67% Buy, 17% Hold, 16% Sell
Average 12-month target price: 84.86p, +41%
FY 2015 Results: 25 February
All pricing and consensus data from Bloomberg on 16 Feb; Consensus breakdown available on request
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Prepared by Michael van Dulken, Head of Research
