Lloyds share price consolidates after hitting near 5-year high
After a huge rally over the past eight months, Lloyds shares have paused, but more upside is possible should the Bank of England cut rates.
Lloyds share price consolidates after hitting near 5-year high
Lloyds’s share price reached a four-year high of 57.4 pence (p) in May 2024, but it is still below its late 2019 peak of 73.7p.
The share price has stabilised around 55p, possibly due to profit-taking after the recent gains. This pattern is not uncommon during recovery periods, as seen with Rolls-Royce Holdings earlier in the year, with share prices often having to go through periods of consolidation before a new catalyst appears.
Lloyds shares appear undervalued with a trailing price-to-earnings (P/E) ratio of 6.4, well below the FTSE 100's long-term average. Despite expectations of a profit decline this year, forecasts suggest strong earnings growth from 2025 onward, supported by hopes of an economic recovery as inflation eases and interest rates come down.
A potential catalyst for share price growth could be an interest rate cut, expected by autumn. While this might reduce lending margins, it could boost the housing market, benefiting Lloyds as the UK's largest mortgage lender.
However, challenges remain, including a £450 million provision for motor finance issues and the potential for continued high interest rates.
Lloyds share price and technical analysis outlook
The Lloyds share price, up nearly 17% year-to-date, remains above its February-to-May uptrend line at 54.22p whilst trying to reach its 57.40p May 4 ¼ year peak.
Lloyds Monthly Chart
A monthly chart close above its January 2022 peak at 56.00p would probably bode well for the bulls and would push the 200-month simple moving average (SMA) at 63.39p to the fore.
While the mid-June low at 53.04p holds on a daily chart closing basis, the medium-term uptrend will stay intact. Above it the April high at 54.28p, the February-to-June uptrend line at 54.22p and the 55-day SMA at 53.74 may offer support, if revisited.
Lloyds Daily Candlestick Chart
While 53.04p underpins, the 60.00p region should stay in sight.
Analysts recommendations
According to LSEG Data & Analytics analysts are rating Lloyds as between a ‘buy’ and a ‘hold’ with three strong buy, eight buy, five hold and two sell - with the mean of estimates suggesting a long-term price target of 59.93p for the share, roughly 8% above the share’s current price (as of 24 June 2024).
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
