There’s one huge FTSE 100 share that’s worth watching ahead of a half-year results on 30 July.
The company that I’ve been analysing is Lloyds (LSE: LLOY). So, how do I think the stock is placed ahead of a crunch month for investors?
How do you value bank shares?
Bank earnings can be lumpy. There can be all sorts of provisions, one-off charges, and accounting treatments that can distort the earnings picture from one period to the next.
The price-to-book ratio strips that out, comparing the share price directly to underlying net asset value, which is why it’s the standard tool for valuing bank shares.
According to the company-compiled analyst consensus published by Lloyds on 14 April 2026 (based on 18 models), the stock’s tangible net assets per share are forecast to rise from 57p in FY25 to 61.8p this year.
Against the price it traded at early on 6 July of 115.5p, that puts the forward price-to-tangible-book (P/TB) ratio at 1.87 times. Here’s how that compares to some key peers:
- HSBC: 1.65x
- NatWest: 1.4x
- Barclays: 1x
- Peer average: 1.35x
Lloyds looks to be trading at a premium to the peer average of 1.35 times. That premium reflects some real strengths of the bank including its leading market position and strong loan book.
But it also means there’s a defined level the market could re-rate down to if results disappoint. So what’s driving that premium in the first place?
What’s behind the numbers?
The same consensus document explains why the market is willing to pay up: return on tangible equity is forecast to climb from 12.9% in FY25 to 16.7% by FY26. That’s a strong trajectory for a UK domestic lender.
| Scenario | Multiple applied | Implied price | Move from today |
|---|---|---|---|
| Premium widens toward HSBC’s level | 1.65x | 101.97p | -11.7% |
| Premium narrows to peer average | 1.35x | 83.4p | -27.8% |
Even using HSBC’s premium — the highest in the peer group — as the upper bookend, the implied price still sits slightly below where the stock trades today.
In other words, on this measure, the market is already pricing this stock as rich as, or richer than, any of its domestic peers.
That’s a useful context for investors who are considering buying the stock today, even if there are some nuances to each bank’s value proposition.
What are the risks?
The same consensus data shows Q1 2026 impairment more than doubling versus Q4 2025 (£380m versus £177m), with the asset quality ratio nearly tripling (0.32% versus 0.14%) and return on tangible equity dipping slightly (14.6% versus 15.7%).
Having said that, none of these numbers are alarming me at their current levels.
If July’s results confirm credit quality is softening faster than forecast, I think we could see Lloyds fall to around 102p per share based on a reversion to HSBC’s P/TB ratio.
It’s not all doom and gloom
Given management reiterated full-year guidance last quarter, my own expectation is that results day is more likely to confirm the growth and returns trajectory than derail it.
But the premium the stock trades at relative to peers means there’s certainly room for disappointment. Despite the solid yield, I don’t think Lloyds is worth considering at the current price.
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Ken Hall does not hold any positions in the companies mentioned.
