Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Lloyds annual results – what now for the shares after their recent surge?

The Q4 2020 rally in Lloyds has hit a wall at 40p, and it is unclear whether annual results will provide much reason for the bounce to keep going.

Lloyds Source: Bloomberg

When is Lloyds’ earnings date?

Lloyds reports full-year (FY) earnings on 24 February.

Lloyds earnings – what does the City expect?

Lloyds is expected to report adjusted earnings per share (EPS) of 1.4p, down 82% over the year, while revenue is forecast to drop 17% to £15.2 billion. It has beaten earnings forecasts in six of the last eight results, but missed on revenue in five of the last eight.

For a share price that has rallied 60% since the September low, Lloyds’ results may not offer much comfort in the near term, and perhaps provide little in the way of fresh reasons to buy into the rally.

The Covid-19 pandemic might have begun to ease, but the economic consequences will remain with us for quite some time. A route out of lockdown is now planned by the government, but only slowly, and as a result the economic outlook is not likely to improve any time soon. Low rates mean profitability will remain under pressure, but at least any further disruption to the UK high street and consumers is likely to be minimal.

Ultimately, Lloyds will struggle to find a meaningful catalyst for the time being, although the second half of the year might begin to provide more good news.

How to trade Lloyds’ earnings

Lloyds currently has a median broker target price of 41.1p, compared to a closing price of 38.3p on 19 February. Of the 26 brokers covering the stock, 13 have ‘buy’ recommendations, with nine ‘holds’ and four ‘sells’.

The average move on results day is 4.1%, with current options pricing pointing towards a 4.4% move for this week’s earnings.

Lloyds’ share price – technical analysis

Like many UK stocks, the fourth quarter (Q4) of 2020 rebound in Lloyds’ shares has hit a wall, in this case around 40p. Gains above this level have proven impossible to sustain, but from a bullish perspective the price has avoided falling below trendline support from the September low, finding support around 33p for the second time in two months.

Lloyds chart Source: ProRealTime
Lloyds chart Source: ProRealTime

A dip towards 35p might test rising support once again, while a more long-term bullish view requires a move back above 40p.

Lloyds – solid but uninspiring

Most of the good news appears to have been factored into the share price of Lloyds and other UK banks, and for now this might mean that they continue to struggle, or at least have difficulty in continuing the rally from late September 2020.

While not cheap, the shares trade on a price-to-earnings ratio (PE) of 10.6, far from overly expensive. But after surging over 50% since late September the next move higher will require a new catalyst, something that has yet to arrive.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa 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.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.