Lloyds Share Price: Is There Still Value for Investors in 2025?
According to a recent report by Yahoo Finance UK, the Lloyds share price has experienced a significant surge in recent weeks, driven by a strong first-quarter result that has propelled the company’s valuation to fresh 52-week highs. As reported by Yahoo Finance UK, the banking giant’s valuation has increased by 10% since early May, reaching a new 52-week high of 78.98p last week before closing at 77.54p on Friday. This represents a year-to-date gain of over 40%.
Yahoo Finance UK notes that one factor contributing to this impressive performance was Lloyds’ quarterly earnings update earlier this month, which reported a statutory profit after tax of £1.1bn and a 12.6% return on tangible equity (RoTE). As quoted in the Yahoo Finance UK report, this continues an upward profit trajectory from the second half of last year, with the bank remaining confident of hitting its 2025 and 2026 guidance.
The recent gains have resulted in Lloyds shares trading at a price-to-earnings (P/E) ratio of 12.6, which is broadly in line with the FTSE 100 average, as reported by Yahoo Finance UK. The dividend yield sits at a respectable 4.1%, backed by a total dividend payout of 3.17p per share for 2024, which is above the Footsie average and comfortably covered by earnings, according to Yahoo Finance UK. This is also supplemented by a £1.7bn share buyback programme, which forms part of investors’ total return.
In terms of valuation metrics, Yahoo Finance UK highlights that Lloyds currently trades at a price-to-book (P/B) ratio of one times, which is higher than some peers like Barclays (0.65) but below others like HSBC (1.1). As noted by Yahoo Finance UK, Lloyds appears to be in decent shape, with the bank being profitable, well-capitalised, and returning cash to shareholders through dividends and buybacks. Its valuation metrics suggest that it is neither a screaming bargain nor overpriced.
However, as reported by Yahoo Finance UK, there are risks to consider, including the ongoing fallout from the motor finance scandal, which could lead to further provisions or regulatory scrutiny. Additionally, the broader economic health of the UK, which could impact loan performance and profitability, is also a concern. Nevertheless, Yahoo Finance UK notes that the bank’s focus on cost control and digital transformation could provide future avenues for growth.
In conclusion, as reported by Yahoo Finance UK, the Lloyds share price reflects a bank that is performing well in a challenging environment. Whether it is good value at the current valuation really depends on where the UK economy is headed and how well the banking sector performs in the next three to five years. As stated in the Yahoo Finance UK report, "Lloyds appears to be in decent shape. The bank is profitable, well-capitalised, and returning cash to shareholders through dividends and buybacks. Its valuation metrics suggest to me it’s neither a screaming bargain nor overpriced."
Source: https://uk.finance.yahoo.com/news/lloyds-share-price-offering-investors-141800372.html
