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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.

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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