LYG - Lloyds Maintains Profitability Targets Shares Remain Attractive
2024-02-24 05:39:42 ET
Summary
- Lloyds' Q4 results delivered a few surprises, but net interest income was largely in line with expectations.
- Management affirmed 2024-2026 profitability targets even as certain peers walked down theirs. While interest rates look set to fall, the bank does have some tailwinds to look forward to.
- Capital returns' potential remains compelling, while the stock's discount to tangible book value looks much too cheap relative to earnings power.
Shares of British bank Lloyds (LYG) continue to look attractive following the release of Q4 results on Thursday (Feb 22). In my last piece , I highlighted the bank's compelling capital returns potential, with Lloyds essentially in position to distribute all of its near/medium-term capital generation to shareholders, with this equating to total annual shareholder yield potential of roughly 13-15% at the then market-cap. The stock's valuation also seemed modest relative to the bank's earnings power, with that based a then-price equal to roughly 1x tangible book value per share ("TBVPS") and management's medium-term goal of a circa mid-teens return on tangible equity ("ROTE")....
Lloyds Maintains Profitability Targets, Shares Remain Attractive