2025’s been an exceptional year for Lloyds‘ (LSE:LLOY) shares. After years of stagnant growth, the UK’s most popular banking stock is finally enjoying some impressive momentum. And anyone who put £7,000 to work back in January already has over £10,000 today.
But, as all experienced investors know, past performance doesn’t guarantee future results. So what might be in store for this stock between now and November 2026? Here’s what the experts are projecting.
More growth on the horizon
Even after enjoying a 58% jump since the start of the year, the outlook for Lloyds’ shares remains pretty strong looking at the latest analyst forecasts.
Of the 18 experts tracking this business, 12 currently recommend investors Buy shares. And when digging deeper into the forecasts, it’s not hard to understand why.
Even though lower interest rates put pressure on its lending margins, the increased affordability of mortgages could more than offset this impact on earnings through higher volume. And with the recent Supreme Court ruling regarding the UK motor finance scandal drastically reducing the scale of compensation claims, a lot of legal uncertainty has also been lifted.
It’s in this landscape that the team at Jefferies are predicting this FTSE banking stock will finally, for the first time since 2008, reach a share price over £1, at 105p. Morgan Stanley‘s similarly signalled their optimism with a 100p price target, with Goldman Sachs following closely behind with a 99p projection over the next 12 months.
Assuming these forecasts prove to be accurate, then that’s an anticipated potential capital gain of up to 20.6%. And when throwing in the group’s 3.8% dividend yield, a £7,000 investment today could reach a value of up to £8,713 by this time next year.
What to watch
As exciting as the prospect of a double-digit return seems, it’s important to recognise that this comes with some notable risks. Even if mortgage rates fall, a continued rise in house prices in the UK could still reduce demand for borrowing due to a lack of affordability. At the same time, with economic growth slowing to a crawl, demand for business loans could also prove lacklustre.
This dependence on the UK economy has other potentially adverse implications. With wage growth still weak and inflation on the rise, consumer spending in Britain remains weak. That makes growth harder for businesses, resulting in layoffs, meaning lower spending in a vicious cycle.
This is a bit of an extreme scenario. But there are some early warning signs requiring investors to stay vigilant. Specifically, the bank’s impairment charges across the first nine months of 2025 came in at £619m, up from £272m a year ago.
Against a total income of £14.3bn, it’s not devastating by any means, but if impairments continue to expand, it could make these latest bullish forecasts obsolete.
The bottom line
All things considered, I remain cautiously optimistic about Lloyds’ shares. The balance sheet appears robust with management executing a sound business strategy.
Having said that, this isn’t a stock I’m rushing to buy today. Instead, I’m far more interested in other opportunities within this sector that show far more impressive growth potential.
