The Motley Fool

How Have The City’s Expectations Changed At Lloyds Banking Group PLC?

A few months ago I reviewed what City analysts were expecting Lloyds (LSE: LLOY) (NYSE: LYG.US) to earn in the coming years.

Today I’m looking at the latest earnings per share (EPS) forecasts for the government-backed FTSE 100 bank, to see how those expectations have changed since June. All my figures are courtesy of S&P Capital IQ.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

It’s been a positive few months for Lloyds shareholders. The troubled bank continued to sell off its burdensome non-core assets, and even announced future plans to pay out 70% of its earnings in dividends. But did these actions boost the City’s expectations for Lloyds?

Analysts expected Lloyds to earn 5 pence per share this year, according to my article in June. Of the three most recently updated analyst targets for Lloyds’ EPS this year, the average estimate is 5.41p per share, an 8% improvement.

This means that by using those new estimates, compared to a recent share price of 72p, the market is now valuing Lloyds’ shares on a forward price-to-earnings multiple of 13.3.

In June, the consensus then called for an improvement in Lloyds’ earnings to 6p per share for 2014. Looking at the three latest forecasts, the average 2014 earnings estimate is 6.54p per share, 9% greater than previously expected.

It seems that the City is somewhat more optimistic about Lloyds’ near-term earnings than before. However, over that same short time period Lloyds’ share price has surged 18% higher, from 61p to 72p. So, have the positive developments over the summer already been priced into Lloyds’ shares, or is this just the start of the Lloyds turnaround story?

If you already own shares in Lloyds and are looking for an alternative growth opportunity, in this exclusive stock research report our top analysts have pinpointed a highly interesting opportunity.

We call it The Motley Fool’s Top Growth Stock For 2013, and it’s completely free to download, with no strings attached, available for a limited time only.

Just click here to download it for free!

> Mark does not own any share mentioned in this article.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Our 6 'Best Buys Now' Shares

The renowned 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 enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.