Lloyds share price patterns point to a 47% surge ahead of earnings

February 13, 2025 09:01 PM AEDT | By Invezz

Lloyds share price patterns point to a 47% surge ahead of earnings — Image source: Invezz

Lloyds Bank has done well recently

Lloyds is the biggest domestic banking group in the UK, where it serves over 26 million customers. Its business is relatively different from Barclays, mainly focusing on consumer and business lending across all its business lines. Its other businesses are Halifax, Bank of Scotland, and Scottish Widows.

Lloyds stock continued its rebound on Thursday after the company published strong financial results that bode well for other British banks. Barclays’ net profit jumped by over 24% in the fourth quarter, helped by its trading division. These numbers mean that Lloyds likely did well too.

Lloyds Bank will publish its results on February 20th, and analysts anticipate that its business did well. The consensus view is that Lloyds Bank’s net interest income (NII) will be £3.24 billion, slightly higher than the £3.23 billion it made in the second quarter. The annual NII is expected to be £13.76 billion.

British banks have done well in the past few years, helped by the Bank of England’s higher interest rates. The Bank hiked interest rates from near zero during the pandemic to about 5.25%, which leads to a higher net income margin.

The challenge, however, is that the higher rates lead to cash outflows from banks into money market funds, which offer a higher return. This explains why the net income margin growth has slowed.

LLOY earnings preview

Lloyds Bank’s net income is expected to be £4.346 billion, a slight drop from the £4.340 billion it made in Q2.

Analysts are optimistic that the company’s profitability will continue doing well in the coming years even as the Bank of England (BoE) slashes rates. The total annual net income will be £12.8 billion in 2024, £13.3 billion in 2025, and £14.43 billion and £15 billion in the net income.

A key challenge is that the company has an exposure to the motor vehicle insurance industry, that has faced some issues. Some analysts model that it will have an incremental provision of £550 million in the coming earnings.

The other bullish catalyst for the Lloyds share price is that the company is reducing its share count aggressively. It will announce a £1.69 billion share buyback next week. Its total share buybacks for the next few years will be worth over £10 billion, a move that will boost its earnings per share.

Lloyds share price analysis

The weekly chart reveals that the LLOY stock price has been in a strong bull run in the past few months. It has just crossed a key resistance level that was its highest swing since 2016. It had resisted moving above that level since 2016.

The stock has formed an ascending triangle pattern, a popular bullish sign. It also formed an inverse head and shoulders pattern and moved above the 50-week moving average.

Therefore, the stock will likely surge to the 50% Fibonacci Retracement level at 94p, up by 47% from the current level. The upcoming NatWest earnings will offer more information about the banking sector in the UK.

The post Lloyds share price patterns point to a 47% surge ahead of earnings appeared first on Invezz

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.