Lloyds Banking Group (LLOY)

Lloyds has the UK’s biggest mortgage book, and therefore will likely be the institution most influenced by the Bank of England’s November 2017 rate hike. Lloyds will also be closely watched for announcements of further PPI provisions, a possible special dividend or share buyback, and the Scottish Widows £109bn fund withdrawal.

Lloyds shares have been trading in a range of 62p-71.5p since the early part of 2017 after recovering from post-Brexit lows of 47.2p. While shares have yet to break out from resistance, a trend of rising lows has proved supportive since mid to late-2017, supporting the shares at 66p after a 9% sell off from January highs.

Will a further PPI charge see shareholders react negatively to the full year results release? Or might the announcement of a special dividend or share buyback help to inspire fresh confidence in the shares?

Will Lloyds make fresh 3-year highs of 78p (+15%) or fall back to 2017 lows of 61.8p (-8.7%)?

• Shares have retreated from 2018 highs, however found 5-month rising lows support at 66p
• RSI has turned back from oversold, however Stochastics remain below the oversold mark
• Momentum remains negative, however has recovered from its lowest level since the EU referendum
• Brokers are very positive on LLOY, with over 80% forecasting the price will rise over the next 12 months

Broker Consensus: 57% Buy, 18% Hold, 25% Sell

Bullish: Jefferies, Buy, Target 91p, +34% (29 Jan 18)

Average Target: 72.9p, +9.2% (15 Feb 18)

Bearish: Goldman Sachs, Sell, Target 53p, -22% (5 Dec 17)

Pricing data sourced from Bloomberg on 15 February. Please contact us for a full, up to date rundown.