Credit Suisse has lifted its price target on Lloyds Banking Group (LON:LLOY), expecting the bailed-out lender to be a ‘relative winner’ in a rising interest rate environment, Proactive Investors has reported. The analysts further noted that the FTSE 100 group remains their top pick.
Lloyds’ share price has slipped into the red in today’s trading, having given up 0.55 percent to 61.32p as of 14:28 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.71 percent higher at 7,511.30 points. The group’s shares have lost a little over seven percent of their value over the past year, as compared with about a 2.4-percent gain in the Footsie.
Credit Suisse upbeat on Lloyds
Credit Suisse maintained its ‘outperform’ rating on Lloyds yesterday, and lifted its price target on the shares from 85p to 90p. Proactive Investors quoted the analysts as explaining that mortgage margins, a key driver of UK net interest margins (NIM), are improving thanks to the trend towards five-year fixed interest rate products as consumers try to lock in low borrowing costs ahead of further expected rate rises. The broker’s analysis meanwhile shows Lloyds has the most rate-sensitive balance sheet, utilising the most internal hedging, supporting its NIM outperformance.
“Following our in-depth review of Lloyds’ NIM drivers, we are more confident in management’s ability to further surprise on the upside,” Credit Suisse pointed out, as quoted by the newswire.
Other analysts on FTSE 100 group
Barclays, which sees the bailed-out lender as a ‘buy,’ set a price target of 90p on the shares yesterday, while last week, BNP Paribas, which rates the company as ‘neutral,’ set a valuation of 70p. According to MarketBeat, Lloyds currently has a consensus ‘buy’ rating and an average price target of 76.05p.