This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Shares turned over at ceiling of falling channel. Clear falling channel since beginning of year. The bank is still restructuring from the financial crisis, still closing branches and existing businesses. Completion of £1bn share buyback removes an element of support for the shares. As holder of biggest mortgage book in the UK, very much exposed to UK Housing market and higher interest rates worsening borrower delinquency rates.
Risks to Lloyds shares include a general market rally that favours risk asset such as Banks; a strong set of Results end October; an increase in UK interest rates would boost the bank’s profitability (charge more to lend than pay on savings); strong UK housing market data, and of course, broker upgrades.
Consensus is Bullish but still has 18% of brokers saying Sell. 75% of broker target prices may well suggest upside from current levels, to a consensus target of 74p, but the clear downtrend offers a short term trading opportunity until the shares deliver a meaningful breakout.
Next Event: Q3 Results, 25 Oct
Latest Broker 12-Month Consensus: 52% Buy, 30% Hold, 18% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr | |
| Perf % | 3.3 | 0.7 | -1.4 | -5.4 | -8.5 | 9.4 | -17.1 | -18.8 | -17.5 |
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Prepared by Michael van Dulken, Head of Research