This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Lloyds (first-half results 1 August)
As usual with Lloyds, the size of payment protection insurance (PPI) provision, its market share of the mortgage market and the size of its structural hedge will be the key elements to watch for in these earnings. Brexit concerns will dominate too, but the strong start to the year and an interesting yield of 5.5% combined with a price to earnings (PE) ratio of 8.3, comfortably below the five-year average of 9.7, suggests the market is pricing in sufficient difficulties over the next couple of years. By comparison, the rest of the sector trades at 14.8 times forward earnings.
Lloyds’ shares are in an ascending triangle as they look to break above 64p and challenge the downtrend line from the 2018 high. A break above 64p opens the way to 65p, while a close below 62p would suggest a further decline towards 60p.
.jpg)
