LLDTF - Lloyds Banking: Q1 2024 Margin Headwinds Easing As Expected

2024-05-18 05:36:37 ET

Summary

• Shares of leading British bank Lloyds have done well since my last update, with the stock re-rating upwards to circa 1.1x tangible book value.
• Q1 results put the bank on track to meet the first part of management's 2024-2026 profitability targets, with margin headwinds easing as expected.
• Despite now trading for a premium to tangible book value, the stock continues to look attractively valued on both a relative and absolute basis.

Shares of British bank Lloyds (NYSE: LYG ) have done well since my last update in February, outperforming the wider European financial space ( EUFN ) with a circa 25% total return in that time. While this amounts to a strong run given the relatively short timeframe, Lloyds remains cheap on both an absolute basis and relative to certain peers. With Q1 results nicely in line with management's near-term financial goals, these shares remain attractive overall, though I downgrade them a notch to 'Buy' following their strong recent gains. ...

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