After the protracted decline that was 2018, Lloyds Banking Group shares have galloped through the first few months of 2019.
Opening at 2 and a half year low of 50.5p, the stock managed to rise to an 11-month peak of 66.6p by mid-April, only to pull back to 62.9p thanks to the FTSE’s post-Easter issues.
What certainly helped was the tone struck in February’s full year results.
While its peers were warning on the potential impact of Brexit, Lloyds said it is facing the future ‘with confidence’, and that it is ‘planning for a deal’ and a ‘smooth’ transition that should lead the economy to grow at the same 1-1.5% pace as seen currently.
This followed the firm posting a 24% increase in net profit to £4.4 billion – a figure that was below the £4.6 billion expected, so Lloyds shouldn’t be feeling too comfortable – and a 5% hike to its dividend to 3.21p per share, alongside a £1.75 billion share buyback.
It did, however, have to set aside £750 million for PPI payments across 2018, taking the total to a staggering £19.4 billion.
Given the weak Q1 reports from Barclays and RBS – the former lamented a ‘challenging income environment’ while the latter warned that Brexit uncertainty ‘is likely to make income growth more challenging in the near term’ – it is going to be interesting to see whether Lloyds carries over its bullishness from February.
As for the figures themselves, analysts are expecting a very slight 0.1% drop in earnings to 2p per share, with a 1.5% dip in revenue to £4.5 billion.
Lloyds Banking Group shares have a consensus rating of ‘Buy’ alongside an average target price of 73.13p.
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