Lloyds share price finds key support ahead of earnings: will it rebound?

The Lloyds share price will be in the spotlight this week as the blue-chip British bank publishes its financial results on Wednesday. LLOY dropped to 97.50p on Monday, down slightly from this month's high of 104.9p.

Lloyds Bank earnings and Bank of England decision

British banks, including Lloyds, have come under increased pressure in the past few weeks as the Iran war has led to concerns about the British economy.

The company will now have a chance to talk to investors about the business conditions when it releases its earnings on Wednesday.

Its consensus report shows that analysts expect that the company’s long-term growth will continue because of its market share in the UK and the fact that it has diversified its business in the past few years.

The consensus is that the company made a net interest income of £3.55 billion in the first quarter, with its total income rising to £4.8 billion.

Lloyds Bank is also expected to make an underlying profit of £1.8 billion and a profit of £1.3 billion.

Most importantly, analysts expect that the company’s annual net income will continue growing in the foreseeable future. For example, its annual income this year will be £20.2 billion, up from £18.2 billion it made last year. It will then jump to £22 billion in 2028.

The same growth is expected in terms of its net profits, which are expected to move to £7.77 billion from £6.2 billion this year. Historically, Lloyds Bank has a long track record of delivering better earnings than expected.

The company will also continue rewarding its shareholders through buybacks and dividends. Its share buyback this year is expected to be £1.7 billion and £3 billion in 2028. Also, the dividend per share is expected to move to 6.12p in 2028 from the current 4.31p.

The other key catalyst for the Lloyds share price will be the upcoming Bank of England interest rate decision on Thursday. Economists expect the bank to leave interest rates unchanged at 3.75%.

Officials will likely hint that the rate will remain in this level for a while because the UK is now in a stagflation period, which is characterized by higher inflation and slow economic growth. Hiking rates because of the soaring inflation will derail the economic growth further.

LLOY stock chart | Source: TradingView

The daily timeframe chart shows that the LLOY stock price has retreated sharply in the past few days, moving from a high of 105p to the current 97.5p.

On the positive side, the stock has found support along the 50-day and 100-day Exponential Moving Averages (EMA). The Average Directional Index has also continued falling, a sign that the sell-off is losing momentum.

Therefore, the most likely scenario is where the stock rebounds after the company publishes its financial results on Wednesday. If this happens, the next key target to watch will be at 105p, the highest point on April 17.