Lloyds Share Price: Are Barclays and Goldman Sachs Analysts Wrong?

Lloyds bank

Lloyds share price is down by more 0.25%, continuing the sharp decline experienced on Friday, when the company released its quarterly earnings. The shares are following the footsteps of HSBC whose share price dropped by more than 5% in London and Hong Kong.

Lloyds stock price is trading at 26.16p, which is the lowest it has been since 2012. At the same time, analysts at Barclays and Credit Suisse expect that the stock will continue rising.

Lloyds Earnings Disappointed

Lloyds Bank reported weak quarterly earnings as I had predicted on Thursday. I expected that the earnings would be weak because of the bank’s exposure to individual and corporate debt in the UK. Also, unlike Barclays, the bank does not have a meaningful trading business, which means that it had nothing to fall back to.

Lloyds Bank reported an earnings per share of £-0.01 on revenue of £3.46 billon. The EPS was in line with what analysts were expecting while revenue was slightly lower than the £3.68 billion that analysts were expecting. Its net income declined by 16% to £7.4 billion.

Most importantly, the bank allocated more than £2.4 billion to bad loans, which was 60% higher than what analysts were expecting. In a statement, the bank said that it had seen increased consumer deposits in the quarter. However, with interest rates at historic lows, the bank will not earn meaningful returns on these deposits. The company said:

“As mentioned, we saw a significant increase in customer deposits in the first half up £29 billion on year-end and ahead of the market. This, in turn, reflects the strength of our brands in uncertain times.”

Analysts differing opinion on Lloyds share price

Analysts have differing opinions about the direction for Lloyds share price. In a statement earlier today, analysts at Barclays said that the shares could climb to 45p, implying a near 50% increase from the current price. Analysts at JP Morgan have a similar sentiment. They expect the shares to climb to 45p.

Meanwhile, Credit Suisse and Deutsche Bank reiterated its rating on the share price. Meanwhile, analysts at Goldman Sachs and Berenberg are a bit pessimistic about Lloyds stock. They have a target of 29p and 30p, respectively.

Lloyds Stock Analysts Forecasts

Lloyds Stock Analysts Forecasts

Lloyds share price technical outlook

The weekly chart shows that an important thing happened on Lloyds share price on Friday. The stock moved below the important support of around 27p. Also, the price is now below the 50-day, 100-day, and 200-day moving averages, which implies that bears are in total control. Further, the red rectangle shows that the price was indeed in a holding pattern since March. Therefore, the price is likely to continue falling as bears now target moves below 25p.

On the flip side, a move above 37p will invalidate this trend. This price is along the upper side of the previous holding pattern.

Don’t miss a beat! Follow us on Telegram and Twitter.

Lloyds Stock Price

Lloyds share price

More content