Lloyds’ share price (LON:LLOY) has fallen deep into the red even as RBC maintained its ‘outperform’ rating on the bailed-out lender. Proactive Investors quoted the broker as arguing that the company was the most capital generative of the UK banks and offers a consistent dividend yield of 11 percent.
As of 14:42 BST, Lloyds’ share price had given up 1.45 percent to 58.34p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.61 percent higher at 7,448.54 points. The group’s shares have given up more than five percent of their value over the past year, as compared with about a 2.3-percent fall in the Footsie.
RBC sees Lloyds as ‘outperform’
RBC reaffirmed Lloyds as an ‘outperform’ today, without specifying a valuation on the shares. Proactive Investors quoted the broker as commenting that the FTSE 100 lender had maintained the highest mortgage rates in the sector but sacrifices market share as a result.
“We expect a more positive mortgage market spread environment to benefit Lloyds through growth more than margin as other rates in the market converge with Lloyds, leading to more stable margin but perhaps better growth as the market normalises,” the analysts pointed out, adding that the company had “a greater proportion of term deposits than other UK banks which helps”.
Other analysts on FTSE 100 bank
Earlier this month, HSBC, which is ‘neutral’ on the bailed-out lender, set a target of 58p on the Lloyds share price. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average valuation of 71p.
Morgan Stanley reaffirmed Lloyds as a ‘top pick’ earlier this month, saying in a note on UK banks that the bailed-out lender’s valuation was ‘compelling’. The broker continues to expect a £2.5-billion share buyback to be announced at year end, driving a total yield on the stock of 12 percent.