The Motley Fool

5 reasons I think Lloyds share price can touch 60p

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

A brochure showing some of Lloyds Banking Group's major brands
Image: Lloyds Banking Group

Lloyds Bank (LSE: LLOY) has seen some rocky times in recent years. It was impacted by Brexit and the limbo around it, a indifferent economy, and the corona crisis. The effect can still be felt, to be sure. 

But things are looking up. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

This is evident from its improving financials, expectations of better asset quality, and the return of economic growth.

Lloyds share price trends upwards

It is little wonder then that the Lloyds share price has been on a roll. From the end of January it is up by over 45%. Over the past year, it is up by an even more impressive 68%. 

As I write, it is at 48p. This means, in a single bullish trading session it can touch 50p. In my last article on the Lloyds share price, I had raised the question of whether it was possible. 

My conclusion was that it could read 50p. I saw this happening in months, if not less.  It is almost there in just over two weeks already.

How about 60p for the Lloyds share price?

This leads me to the next question. Can the Lloyds share price rise to 60p?

Again, I think it can. Here are five reasons why.

#1. Improving financials: Lloyds Bank’s next set of results is likely to see continued improvements as fundamental aspects impacting the bank’s business are in its favour. Stock prices can move upwards when the company releases positive updates or results. We can expect some share price increase when that happens. 

#2. Continued stock market rally: I expect the stock market rally to continue. Even though the FTSE 100 index has had a wobble in the past few days, its broad trend is upwards. This should positively impact the Lloyds share price as well.

#3. Possible return of high dividends: Low present dividends reduce banks’ attractiveness to investors. But there is little banks can do about it. Dividends are based on regulatory guidance, which luckily, is expected to be temporary. As the economy goes back to normal, these measures should be withdrawn. This could add further momentum to the Lloyds share price, which had a high dividend yield before the pandemic. 

#4. Encouraging past share price trends: Going by past trends, it has taken a little over three months to add 12p to its share price. Conceivably then, it can rise to 60p in another three months. In other words, the increase is not outside the realm of possibility.

#5. The past is proof: At the start of 2020, it was already at 60p levels, so they are not unheard of or too far in the past to be reached again. 

A point to note

From present levels, this would mean a 25% increase in the Lloyds share price in a quarter. But unless it can continue to rise even from there, I think a long-term investor should look at the bank more carefully. 

For years before the pandemic happened, the bank’s price trend was flat. And after the pandemic, it dropped sharply. 

What I’d do now

For a long-term investment, I would think this one through first. 

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.