Lloyds Banking Group (Q3 update 25 October)
At just 9.1 times forward earnings versus 13.6 for its sector peers, Lloyds still looks attractive, helped by a steady rise in underlying earnings. One worry is still the further costs for payment protection insurance (PPI) claims, an issue that refuses to go away, while Lloyds’ increased presence in credit cards means the potential for higher bad loans. As ever, it is the dividend that makes Lloyds attractive, especially since the share price has essentially gone nowhere for months.
The shares faltered recently at 68p, but the bounce from 62p has been maintained, as the 50-day simple moving average (SMA) of 65.5p comes into play. Further gains would target 69p, and then 71p. A move below 65p would head towards the September low at 62p.