Stock market

What will happen to Lloyds share price after 14% rise in 2024?

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I have noticed that Lloyd’s (LSE: LLOY) share price has performed well so far this year.

So what led to this shortfall, and what’s on the cards going forward? Allow me to offer my two cents.

False fascination or new horizons?

Lloyds shares have risen 14% in the calendar year to their current level of 55p from 48p at the start of the year.

Over the 12-month period, shares are up 22% to current levels from 45p at this time last year.

I think that’s a big part of the increase in economic activity in recent months. Inflation levels have come down, and the property market seems to be reacting positively. It is worth remembering that Lloyds is the UK’s largest mortgage provider.

Before I get carried away, I should note that Lloyds shares have been underwhelming for several years. They are not alone, as many of the UK’s biggest banks have not grown at all since the 2008 financial crash. After that, they had to deal with Brexit, the pandemic and now economic challenges.

what’s next?

Let me be very clear, it is very difficult to predict what may and may not happen to a share price going forward. There are many moving parts, internal and external, that can affect this.

For Lloyds, the biggest positive will be the economic issues in favor of the business. The biggest thing will be that the interest rate will be reduced. This could push the share price above 60p. However, there is no guarantee that this can happen.

If the rate falls, it could boost the home buying and selling and property market. This would serve Lloyds well due to its dominant market position.

On the other hand, continued trouble on the economic front may not be good news. Risk with Lloyds compared to other established banks, eg HSBCFor example, there is a lack of international diversity. As Lloyds mainly relies on the UK market, this could prevent the shares from moving further.

Another issue that could derail recent share price gains is the Financial Conduct Authority’s (FCA) investigation into car finance mis-selling. Penalties can reduce performance, reverse returns, and reduce share price.

My position

From an investment perspective, personally, I would be willing to buy some shares for my holdings when I can for a few reasons.

First, a dividend yield of around 5% is attractive. However, I know that profits are never guaranteed.

The shares, then, seem reasonable value for money as they trade on a price-to-earnings ratio of around eight.

Finally, Lloyds’ position in the UK banking ecosystem – particularly as the UK’s largest mortgage provider – is hard to ignore. The housing imbalance in the UK means that future growth opportunities are likely to drive business towards previous growth in the long term, in my view.

Overall, I can’t see the Lloyds share price going up much, at least not in the short to medium term. This small increase in recent months is a response to positive economic news. If the economic positivity continues, I can see Lloyds shares moving higher as well.


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