The Lloyds Banking Group (LSE: LLOY) share price is up 14% in just the past month. And since the start of 2025, we’re looking at a very nice 73% gain.
At the time of writing, the shares are changing hands for around 95p. So it’s surely odds-on for 100p by Christmas, if not sooner, isn’t it? Full-year results are due at the end of January, and anticipation of that might even give the shares an extra year-end boost.
It looks like we should see a solid set of results too, judging by October’s third-quarter update.
Guidance raised
The bank slightly upgraded its full-year guidance for net interest income to approximately £13.6bn, from the £13.5bn suggested at half-time. The slow progress in lowering base rates by the Bank of England will be helping. But interest income could come under pressure in 2026 if we finally see some heftier cuts — and that’s one of the risks with the stock right now.
We should see a return on tangible equity of around 12%, which seems fine. But it would have been better, at about 14%, except for the motor finance charge recorded in the quarter.
Analysts are bullish about Lloyds, predicting strong earnings growth in the next few years. They expect earnings per share to soar 80% between 2024 and 2027. And that should drop the Lloyds price-to-earnings (P/E) ratio as low as 8.4 by then.
Price prospects
Hmmm, brokers only have an average price target on the stock of 94p. That’s almost bang on where it is as I write late on 11 November. And it’s even with a healthy Buy consensus. But they’re almost certainly just out of date — individual analysts can take months to update their targets.
What would a 100p price mean for the Lloyds share price valuation? The current forecast P/E for 2025 stands at 14.2. And that would rise to 15. For 2025 earnings estimates, I judge that as about fully valued.
At 100p, forecasts should mean a P/E of 8.9 by 2027. And if things go as predicted, that could put Lloyds shares firmly down in the bargain basement again.
So what about £1?
Lloyds shares are not crazily undervalued like they were a few years ago. And the price rises of 2025 have pushed the forward dividend yield down to just 3.8%. A rise to 100p would drop it to 3.6%. I can see plenty of FTSE 100 yields I like better, and they could drag dividend investors away from Lloyds.
Lloyds, along with the other UK banks, still faces economic uncertainty. But I can see an end to the past few chaotic years. It was always going to take a while for the inflationary effects of pandemic policies to work their way out. But it’s coming within sight.
So, 100p by Christmas? I’m never going to try to predict a share price as precisely as that. But I am thinking of buying more.
