Analysts remain cautious after the UK-based Lloyds Banking Group PLC (GB:LLOY) declared its first-half results for 2024 last week. Post-results, LLOY stock has received five ratings from analysts, including two rating downgrades. On TipRanks, LLOY stock has received a Moderate Buy rating.
Overall, shareholders were also unimpressed with Lloyds’ results, which were impacted by rising costs and tougher economic conditions. Also, the bank failed to raise its NIM (net interest margin) guidance for the full year, leading to further disappointment.
Recap of Lloyds’ H1 Results
In the first half, Lloyds reported a 14% year-over-year decrease in statutory pre-tax profits to £3.3 billion, slightly exceeding the consensus estimate of £3.21 billion. The bottom line was hit by higher operating costs of £4.7 billion, which increased by 7% from the previous year. The bank’s attempts to keep costs under control were offset by rising inflation, ongoing strategic investments, and anticipated severance expenses.
Despite the decline in profits, the bank increased its interim dividend by 15% year-over-year to 1.06p per share.
Analysts’ Ratings for LLOY
UBS analyst Jason Napier downgraded his rating on LLOY stock from Buy to Hold after the results. Napier also reduced his price target from 62p to 61p. He stated that even though the bank’s earnings were “broadly stable” with positive dividend growth, the stock trades at a premium compared to its competitors, which led to the rating downgrade.
Similarly, Benjamin Toms from RBC Capital downgraded his rating on LLOY stock to Hold from Buy. Meanwhile, Barclays analyst Aman Rakkar confirmed a Buy rating on the stock, predicting an upside of 21%.
In addition, analyst Gary Greenwood from Shore Capital reiterated a Hold rating on the stock. Greenwood noted that the shareholders were let down by the absence of any guidance upgrade for NIM, especially given the prolonged period of high interest rates. He sees Lloyds shares trading at a “fair value.”
Are Lloyds Shares a Good Buy Now?
LLOY stock has a Moderate Buy rating based on 10 recommendations, of which five are Buy. The Lloyds share price target is 63p, which indicates 9% upside potential.
See more LLOY analyst ratings.
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