The Lloyds share price is up nearly 200% over 5 years! What about the next 5 years?
The question now is whether this momentum can be maintained into the next five years. This depends on why Lloyds shares have recovered so sharply, what's moving the shares today, and the challenges and opportunities ahead.
Things just got better
Lloyds's recent resurgence is mainly down to stronger earnings, reduced credit risk, and a re-rating of UK banks by investors. The company has consistently delivered improved earnings, with its latest underlying figures showing more solid growth in net interest income and cost discipline.
Unlike the dark predictions made during the post-pandemic period and the height of the cost-of-living crisis, bad loan charges have remained under control, mainly because mass defaults among consumers and businesses have not materialised.
With defaults in check, investors have been able to focus on the bank's stable cash flows and attractive dividend. Meanwhile, the entire UK banking sector has been re-rated. Investors are now more willing to pay higher price-to-earnings ratios as fears over financial stability and the impact of Brexit have faded.
Fresh momentum
A big catalyst recently has been some much-needed legal clarity around the car finance mis-selling scandal. This case had cast a shadow over Lloyds and its rivals. The Supreme Court sided mostly with the lenders, reducing the threat of massive compensation payouts.
Lloyds has already set aside over a billion pounds for possible claims, but the judgement removed a lot of the market's uncertainty. That's given brokers and shareholders reason to become more optimistic about the stock's outlook.
It's not going up another 200%
Looking ahead, however, things could get a litter trickier. Bank shares like Lloyds tend to move in step with the economy, and the UK's economic outlook is mixed at best. Growth is poor and the confidence in our economic leaders is deteriorating.
However, interest rates remain supportive. Lloyds's huge deposit base and simple lending model should help margins stay resilient for a while. The bank has also benefitted as it unwinds the financial hedges put in place in the era of ultra-low rates.
While risks remain, Lloyds's foray into being a residential landlord, via its Lloyds Living brand, is a bold new venture. It comes with its own uncertainties and will take years to prove itself. However, it's certainly worth keeping an eye on. It already has a portfolio of over 6,000 homes.
So, after such a dramatic recovery, Lloyds shares may not see another 200% rise soon. However, legal clouds have lifted, earnings are strong, and there are some new growth drivers. I believe it's worth considering as a long-term investment. I'm continuing to hold my shares, with the expectation of modest gains.
The post The Lloyds share price is up nearly 200% over 5 years! What about the next 5 years? appeared first on The Motley Fool UK.
More reading
5 Stocks For Trying To Build Wealth After 50
One Top Growth Stock from the Motley Fool
James Fox 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.
Motley Fool UK 2025
Fehler beim Abrufen der Daten
Melden Sie sich an, um Ihr Portfolio aufzurufen.
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 minutes ago
- Yahoo
Currys rebrands B2B division in shift towards small business tech segment
UK electricals retailer Currys has initiated a significant shift towards the UK's small business technology segment by rebranding and expanding its B2B division, Currys Business. The move comes in response to a substantial increase in clientele, with 75,000 new business customers acquired in the 12 months since August 2024. The retailer aims to capitalise on the market opportunity presented by small and medium enterprises (SMEs) in the UK. Currys Business has added three new local business hubs in Stevenage, Solihull and Exeter in July 2024, increasing its total to 57 locations with plans for three more this year. These hubs, situated within Currys stores, provide SMEs with personalised consultations, exclusive business pricing, 30-day payment terms and business-relevant services such as onsite IT installation. The expansion reflects Currys' understanding that SMEs prefer face-to-face service, setting it apart from online B2B platforms such as Amazon Business. Currys Business also supports SMEs through its contact centre, offering nationwide access to dedicated business experts for tech needs ranging from energy savings to tech troubleshooting and recycling end-of-life products. Currys Business director Chris Williams stated: 'We're seeing growing demand from small businesses who need and want far more than just online ordering. 'Small businesses are facing huge cost pressures, looking to save money wherever possible which is where the expertise of Currys Business colleagues can really make a difference. After 30 years supporting businesses, we're perfectly positioned to become the UK's one-stop-shop for SMEs who want technology solutions, services and support delivered with human expertise.' Besides sales, Currys Business extends its offerings to tech life cycle service solutions, including delivery, installation, onsite configuration and end-of-life support. These services ensure secure disposal of IT assets and bulk recycling, providing businesses with necessary certifications and data protection. Currys Business is also helping customers leverage AI technology, which can transform SMEs and drive growth. "Currys rebrands B2B division in shift towards small business tech segment" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
9 minutes ago
- Yahoo
elf Beauty (ELF) Jumps 9.7% as Analyst Grows More Bullish Despite Product Price Increase
We recently published . e.l.f. Beauty, Inc. (NYSE:ELF) is one of the best-performing stocks on Monday. e.l.f Beauty saw its share prices jump by 9.73 percent on Monday to finish at $111.67 apiece as investors took heart from an investment firm's bullish rating and price target upgrade for its stock. In a market note, Morgan Stanley upgraded e.l.f. Beauty, Inc. (NYSE:ELF) to 'overweight' from 'equal weight' previously, alongside a higher price target of $134 versus $114 prior. The new price suggested a 20-percent upside potential from its latest closing price. Last August 1, e.l.f. Beauty, Inc. (NYSE:ELF) slapped a 14-percent price hike on its products, saying that it would assess how consumers would respond. 'It will take a couple of weeks for that to fully roll out within retail. And so that is something that we're watching for,' e.l.f. Beauty, Inc. (NYSE:ELF) CFO Mandy Fields has said. However, Morgan Stanley posted a more optimistic outlook, saying that consumers typically do not tend to be especially sensitive to price increases 'given the relative importance of beauty products to consumers.' Copyright: citalliance / 123RF Stock Photo Additionally, it underscored that e.l.f. Beauty, Inc.'s (NYSE:ELF) products are relatively cheaper compared with those from its counterparts, and there is less opportunity for consumers to find more affordable substitutes. While we acknowledge the potential of ELF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
9 minutes ago
- Yahoo
If You'd Invested $10,000 in Navitas Semiconductor Stock 2 Years Ago, Here's How Much You'd Have Today
Key Points Its partnership with Nvidia is proof of the long-term potential for silicon carbide and gallium nitride chips. Investors are looking to 2027 and the launch of new data centers to spur Navitas' growth. 10 stocks we like better than Navitas Semiconductor › If you're wondering how much you'd have if you'd invested $10,000 in Navitas Semiconductor (NASDAQ: NVTS) stock two years ago -- and I'm sure you are since you're reading this -- the answer is about $7,500 as I write this on Aug. 10. While that might surprise investors in Navitas Semiconductor who've only been watching it in 2025, as it's up 85% so far this year, it does highlight some points about investing in growth stocks. Why Navitas Semiconductor's stock has gone up so much in 2025 The simple reason for this year's jump comes down to the mid-May announcement of a partnership with Nvidia to develop data center power architecture for the next generation of data centers, due to launch in 2027. The new more efficient, reliable, and lower-maintenance cost 800 V data centers need silicon carbide (SiC) and gallium nitride (GaN) chips (Navitas' specialty) in the power conversion process in the new data centers. Considerations for growth investors The fact that the stock is down over the last couple of years indicates that patience is key when investing in growth stocks, and it pays to avoid getting caught up in euphoria. For example, in the summer of 2023, Navitas offered 11.5 million shares at a price of $8, which the market eagerly took up. Unfortunately, some of its key end markets, like electric vehicles and consumer electronics (notably mobile phones), slowed markedly, and the stock declined. However, it makes sense to buy into weakness if you have data-backed belief in the long-term growth prospects of a company. This has happened as investors have jumped back into Navitas on the Nvidia news. Do the experts think Navitas Semiconductor is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Navitas Semiconductor make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,060% vs. just 182% for the S&P — that is beating the market by 877.59%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 11, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. If You'd Invested $10,000 in Navitas Semiconductor Stock 2 Years Ago, Here's How Much You'd Have Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
