28-02-2025
Lloyds Gets Big Capital Returns Prediction From Barclays Analyst
(Bloomberg) -- The fundamentals on offer at Lloyds Banking Group Plc are 'too good to ignore,' according to Barclays Plc analysts, who predict the UK bank could return almost half of its market value to shareholders by 2027.
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Analysts led by Aman Rakkar on Wednesday lifted their price target on the British lender to a level above any other tracked by Bloomberg, propelling Lloyds shares to a seven-year high and making them the best performer in the FTSE 100 Index since the start of 2025. The new objective of 90 pence implies upside of more than 30% from Tuesday's close.
According to Rakkar, a sharp step-up in Lloyds' capital generation should help drive higher shareholder returns. He forecasts the dividend will keep growing and sees buybacks building to £4 billion ($5.1 billion) by 2026. That could see the bank return near to half of its £43 billion market capitalization by 2027, the analyst wrote.
Rakkar also increased earnings per share estimates to about 15% above the broader consensus in the wake of last week's results, and believes Lloyds can deliver 'sector-leading fundamentals,' including around 65% EPS growth by 2027 alone.
Deutsche Bank AG's Robert Noble is another analyst predicting Lloyds shareholders will receive more cash. He forecasts the capital return per share in 2027 could be almost double what was seen in 2024. Noble raised his price target by 10% to 88p on Wednesday, the second-highest on the Street.
'Very few European banks offer the same enviable combination of strong revenue growth; tangible net asset value; dividend and buyback growth that Lloyds has to offer,' Noble wrote. 'If the business plan continues to deliver then there is further substantial upside for shareholders.'
--With assistance from Neil Campling.
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