Interactive Investor argues that Lloyds Banking Group’s (LON:LLOY) share price does not reflect the bank’s improved performance, Citywire reports. The comments came after the bailed-out lender’s third-quarter update yesterday when the company also announced the upcoming departure of its finance chief.
Lloyds’ share price rose in the previous session, gaining 1.87 percent to close at 57.72p, as investors digested the results. The shares outperformed the broader UK market, with the benchmark FTSE 100 index adding 41.12 points to close 0.59 percent higher at 7,004.10. This morning, Lloyds’ shares have fallen deep into the red, having given up 1.06 percent to 57.11p as of 08:13 BST, as compared with a 0.98-percent dip in the Footsie.
Interactive Investor weighs in on Lloyds
Citywire quoted Interactive Investor analyst Richard Hunter as commenting yesterday that market consensus for Lloyds had recently improved to a ‘buy’, despite UK bank stocks being out of favour for some time.
“Lloyds bears the additional weight of being seen as a proxy for the UK economy, whose growth has been hampered by the Brexit dilemma,” he continued, adding that the numbers at the bailed-out lender required ‘close monitoring,’ with the group ramping up its lending in what is likely to become a rising interest rate environment.
“The UK consumer, let alone the economy, could yet derail some of Lloyds’ progress to date, even though such a decline would be largely outside of the bank’s control,” Hunter concluded.
Other analysts on bailed-out lender
JPMorgan Chase & Co and Royal Bank of Canada, which see Lloyds as a ‘buy,’ set price targets of 85p and 90p on the shares, respectively, in the wake of the results. According to MarketBeat, the bailed-out lender currently has a consensus ‘buy’ rating and an average price target of 75.95p.