Could the Lloyds share price reach 60p in 2024?

The Lloyds share price has got off to a strong start in 2024. But could it reach 60p by the time the year is over? This Fool explores.

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As I write, the Lloyds share price sits at 53.3p. That’s a 10.9% gain from its opening price of 48.1p in 2024.

But what could the remainder of the year have in store for the stock?

Lloyds has been a serial underperformer in the last five years. During that time, its share price has lost 12.7% of its value. It has clawed back some gains in the last 12 months. But could it reach 60p this year?

Time for 60p?

To reach 60p, Lloyds stock would have to climb a further 12.6%. If I were to do that, it means it would have risen 23.5% over the 12 months. That would be impressive.

That may not be realistic. In fact, I doubt the Lloyds share price will top 60p this year. The one-year price target for the stock is 59p.

Gaining momentum

But while we may not see the Black Horse Bank stride through the 60p barrier in 2024, its share price has been gaining momentum in the past few months and I think it’ll continue heading upwards in the months to come.

It seems many FTSE 100 banks have been held back by negative sentiment more than anything recently. But that looks like it’s changing.

What will drive it?

But what will drive this? Well, interest rates are one factor that will play a significant role.

They’re a double-edged sword. On one side, falling rates will see banks’ margins shrink. Lloyds has enjoyed a prosperous spell recently. Last year, its underlying net interest income rose by 5% to £13.8bn. Lower rates will see this come to an end.

But on the other side, rate cuts should provide the wider market with a boost, which could drive the stock’s price. I think that’s partly why the Footsie has been on a surge this year. Rate cuts look imminent and investors are gearing up for them. Many seem to be more bullish on UK shares right now than in years gone by.

Cheap value

That’s why I think Lloyds looks like great value for money trading on just 6.9 times earnings. That’s way below the Footsie average of 11. Looking ahead, that figure is predicted to drop to just above six by 2026.

Barriers to clear

Of course, rate cut talk is just speculation. And that highlights just how much uncertainty there is surrounding the economy at the moment. As a result, I’d expect more volatility going forward with Lloyds.

Inflation seems to be under control, but we’ve seen signs, both in the UK and US, that have reminded us that we’re not out of the woods yet.

Cash on the side

But I’m fine with some short-term peaks and troughs if I see long-term value, which I do with Lloyds. What’s more, while I wait for its share price to edge higher, I’ll happily receive the 5.2% dividend yield that the stock offers investors.

A long-term play

It may not be this year that we see the Lloyds share price surpass the 60p mark. But I’m confident that it will in the years to come. That’s why I plan to hold onto my shares. At their cheap price, I’d add to my holdings if I had the cash.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Charlie Keough has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc. 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.

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