Lloyds share price continued its strong surge this year as European bank stocks soared and after publishing strong financial results. LLOY soared to a multi-year high of $74.46 also after analysts upgraded the stock, pointing to its strong positioning.
Lloyds Bank stock has jumped by over 252% from its lowest level in 2020, giving it a market cap of over $57.8 billion. So, is it a good stock to buy?
Lloyds stock surge mirrors other European banks
The ongoing LLOY share price performance mirrors the performance of other European bank companies that have surged this year.
Societe Generale share price has jumped by over 50% this year, making it the best-performing major banks globally.
In the UK, NatWest share price has soared by almost 90% this year, while Barclays has surged by 70% in the last 12 months.
Other European banking groups like UBS, Santander, Credit Agricole, Unicredit, and HSBC have all surged. These companies have continued to outperform their American peers like JPMorgan and Goldman Sachs.
The ongoing surge is because many of these banks have benefited from higher interest rates in the past few months. Higher rates helped to boost their earnings, which in turn, pushed them to increase their distributions to shareholders.
Lloyds Bank, which has a dividend yield of 4.13%, has boosted its payouts in the past few quarters, helped by its strong balance sheet. The company is achieving this by continually reducing its CET-1 ratio. It has a CET-1 ratio of 13.5%, and the management now hopes that the figure will drop to 13% by 2026.
These actions have led to multiple upgrades of the Lloyds share price. Just last week, analysts at Morgan Stanley and Peel Hunt upgraded the stock, citing its strong performance and the fact that it may play catch up to other banks.
Morgan Stanley expects that the Lloyds share price will surge to 90p, while Peel Hunt boosted their outlook to 70p.
LLOY business is thriving
The most recent results showed that LLoyds Bank’s business was doing well. For example, over 20 million customers are now using its mobile applications to handle transactions, up from 15 million in 2021.
Another key data point is that Lloyds Bank now has over 3 million mass affluent customers, higher than 2 million in 2021.
Net income has jumped from £15 billion to £17 billion, while the company has addressed the pension deficit that stood at over £7 billion a few years ago.
The most recent results showed that Lloyds Bank’s business did better than expected. Its net interest income came in at £12.8 billion, while its total net income fell by 5% to £17.1 billion.
The company will likely continue doing well this year as demand continue rising in the coming months.
Read more: Lloyds share price patterns point to a 47% surge ahead of earnings
Lloyds share price forecast
The weekly chart shows that the LLOY share price peaked at 74.55p this month. It has remained above the crucial resistance level at 63.35p, the highest swing in October 2024.
The stock has remained above all moving averages, a sign that bulls are in control for now. Also, the Relative Strength Index (RSI) and the Stochastic RSI have pointed downwards.
Therefore, the stock will likely drop and retest the key support at 63.35p, the highest swing in October 24 last year. This performance is known as a break and retest pattern, pointing to more upside in the coming weeks. This means that the stock will ultimately jump above 80p later this year.
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