Menu
Equities By Region Finance and Banking UK

Lloyds share price: UBS continue to see lender as ‘buy’

Share this article!

UBS continues to see Lloyds Banking Group (LON:LLOY) as a ‘buy,’ arguing that the lender is trading at a 13-17-percent discount to a sector trading at the highest implied cost of equity since mid-2016, Proactive Investors reports. The comments came after the bailed-out lender moved to offload its remaining stake in Standard Life Aberdeen (LON:ADN) last week.

Lloyds’ share price rose in the previous session, adding 0.27 percent to close at 63.17p, outperforming the broader UK market, with the benchmark FTSE 100 index shedding 0.43 percent to 7,703.81 points. The group’s shares have lost more than eight percent of their value over the past year, as compared with about a 2.6-percent gain in the Footsie.

UBS sees Lloyds as ‘buy’

UBS reaffirmed Lloyds as a ‘buy’ yesterday, in a review of UK banks, focusing on ring-fencing rules due to come into force next year, which will have an impact on the sector. Proactive Investors quoted the analysts as explaining in a note to clients that UK domestic banks have not been “immune to weak Eurobank sentiment with a more cautious rate outlook compounded by Brexit uncertainty”. As a result, this had left Lloyds and FTSE 100 peer Barclays (LON:BARC)  trading at a 13-17-percent discount to a sector trading at the highest implied cost of equity since mid-2016 when some thought the European Central Bank might cut rates. 

The analysts further pointed out that they thought the impact of the bailed-out lender’s “management 2020 ambition of growing loans by high single digits is already in place, that the market fears Lloyds’ margin decline too much, and recommend buying the stock”.

Other analysts on lender

Goldman Sachs, which sees Lloyds as a ‘sell,’ set a price target on Lloyds of 58p this week. According to MarketBeat, the bailed-out lender currently has a consensus ‘hold’ rating and an average price target of 75.45p.

As of 08:05 BST, Wednesday, 13 June, Lloyds Banking Group share price is 63.25p.

Add Comment

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.