Lloyds Banking Group PLC (LLOY.L) Model Update

First-page research excerpt

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31 Jul 2026 11:36:01 ET │ 11 pages

Lloyds Banking Group PLC (LLOY.L)

Model Update

CITI'S TAKE

Buy

Price (31 Jul 26 12:34)

£1.15

Target price

£1.25

Expected share price return

8.7%

Expected dividend yield

4.1%

Expected total return

12.8%

Market Cap

£66,963M

US$90,172M

Post 2Q26 results and the strategy update we increase 2026E EPS by 4%

but leave 2027-28E EPS broadly unchanged. This reflects 1% higher

revenue assumptions, offset by 0-1% heavier costs and a slightly higher

sharecount. Our PBT forecasts continue to be broadly in-line with

consensus in 2026 and 2027, but 5% above in 2028 where we forecast a

21.6% RoTE (vs consensus 19.9% and target >18%). As we alluded to in

‘Thoughts Post Strategy Update: A Plan Built on Conservative

Assumptions Plus Optional Upside From New 'Ecosystem' we believe

Lloyds targets are predicated on very conservative assumptions and we

believe the strategic vision outlined by management is highly compelling.

We reiterate our Buy rating and 125p target price.

Andrew Coombs, CFAAC

Lloyds Banking Group PLC (GBP)

Year to 31 Dec

2024A

2025A

2026E

2027E

2028E

Net Income (£M)

4,843.2

5,202.8

6,185.0

7,189.9

8,216.4

Diluted EPS (p)

7.8

8.7

10.7

13.0

15.8

Diluted EPS (Old) (p)

7.8

8.7

10.2

12.9

15.8

PE (x)

14.8

13.2

10.8

8.8

7.3

P/BV (x)

1.8

1.6

1.5

1.4

1.3

DPS (p)

3.2

3.7

4.7

5.4

6.2

Net Div Yield (%)

2.8

3.2

4.1

4.7

5.4

ROE (%)

9.8

10.4

14.3

15.8

17.5