It’s my belief that some of the factors plaguing the stock so far this year are molehills rather than mountains. And there’s a possibility that the stock is undervalued by as much as 23%. Let’s take a look at why.

Problems

The newest problem for Lloyds and other FTSE 100 banks is a potential political shake-up. On 18 June, a by-election in Makerfield will bring a new MP into the Houses of Parliament and potentially a new Prime Minister too.

The possible consequence further down the line is a windfall tax on banks. The sector is seen as an easy and popular target for some politicians and it’s telling that banks have suffered multiple percentage drops on days where big election news was revealed.

Another big issue is the long-term consequences of the conflict in Iran. This is likely to push up inflation and will be very bad news for the UK and world economy if it isn’t resolved in the near future. Banks like Lloyds thrive in good economic conditions and struggle in bad ones.

All sounds pretty grim, doesn’t it? But there could be light at the end of the tunnel…

A buy?

For one, even if the worst comes to the worst with the above problems, these are largely short-term issues. They might put the brakes on the share price in the next year or two, but neither should have terrible implications for the health of the company.

And indeed, there is a very big ‘if’ in there. Analysts are very optimistic for the year ahead. The consensus target in the next 12 months is a 23% increase in share price with a 30% increase at the top end. This puts the bank as one of the shares with the most amount of optimism on the Footsie! That’s according to analysts, at least.

And all the while, shareholder returns are among the best that can be found on the FTSE 100. The forward dividend yield of 4.24% is above-average but only tells half the tale. If we include the £1.75bn of buybacks then total shareholder returns stand at a figure closer to 7%.

On the whole? It’s an eternal truth in the markets that political drama can produce some of the best bargains going. Will Lloyds turn out to be one of those undervalued shares when we look back in the years to come? Perhaps. I think it’s worth considering.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

John Fieldsend owns shares in Lloyds.

The post Are Lloyds shares 23% undervalued? appeared first on The Twelfth Magpie.

From 2016 onwards, dividends have risen at an annual growth rate of 5%. It’s grown payouts every year barring the pandemic period, when regulators temporarily stopped bank shares from paying dividends, prompted some reduced payouts:

Lloyds’ shares impress when it comes to yields too, even factoring in those disruptions. Over the past decade, the dividend yield has averaged 5.6%. That comfortably beats the broader FTSE 100‘s long-term average of 3%-4%.

The thing is, past performance isn’t a guarantee of future returns. So can the bank continue paying market-beating dividends?

A 5.9% opportunity

I’m pretty optimistic they can. And so are City analysts. They’re expecting Lloyds’ shares to pay increased dividends every year over the medium term, resulting in yields of:

• 4.3% for 2026.
• 5.1% for next year.
• 5.9% for 2028.

What makes the ‘Black Horse Bank’ such a dividend powerhouse then? Like other retail banks, it provides a range of financial products, from current and savings accounts to credit cards and general insurance. This diversified approach to offering everyday essential services provides reliable cash flows it can use to pay dividends.

Lloyds’ focus on the UK high street specifically has other advantages for dividend investors. The market here is mature with limited growth potential, meaning the bank leans towards returning excess cash via dividends instead of reinvesting in the business. Lloyds’ market-leading positions also helps it to sustain dividends during downturns.

Cash king

What’s more, unlike HSBC and Barclays for instance, this FTSE 100 operator doesn’t have an investment bank. The advantage? More predictable earnings, which in turn makes dividend payouts simpler to sustain.

Critically for dividends, Lloyds is also required to maintain a robust balance sheet for regulatory purposes. With that strength comes its ability to make large and growing shareholder payouts and significant stock buybacks.

Today, its CET1 capital ratio is 13.4%, which bodes well for future dividends. Presumably then, Lloyds shares are a ‘no-brainer’ for investors seeking dividends. Right?

To be honest, I’m not so sure…

Are Lloyds’ shares a buy?

It’s not that I’m expecting dividends to suddenly crash. It’s just that investors need to also consider the outlook for Lloyds’ share price before investing. And I’m concerned the bank’s at risk of a sharp price correction.

Today, the bank trades on a price-to-book (P/B) ratio of 1.2 times. That’s well above the 10-year average of 0.9, and fails to reflect the rising threat the Iran war poses as UK growth stalls and inflation rises. In my view, it also doesn’t channel other threats like thumping motor finance costs and the growing influence of challenger banks.

It’s also worth remembering other FTSE 100 banks such as HSBC have many of the same dividend strengths, but which trade more cheaply and have greater yields. I can see the appeal of buying Lloyds’ shares for income, but I personally prefer to buy other dividend shares today.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Royston Wild owns shares in HSBC.

The post How have Lloyds shares become a dividend investor’s dream? 5 reasons why! appeared first on The Twelfth Magpie.

However, they’ve enjoyed the couple of Stronger years before that. They closed 2023 at 47.71p apiece. Currently they rest at 101.85p.

Investors who’d put money in the bank’s shares in the few years before 2024 would have therefore been greatly rewarded, with their value more than doubling.

But in the present day I know those reading will be more interested in where Lloyds shares might be in the future. This is what I think they can reach by the end of 2027.

Computing a future valuation

Looking at the table below, we can see what analysts think the company’s revenue and earnings per share (EPS) will look like for 2026 and 2027, compared to its 2025 results:

I’m going to use the firm’s current price-to-earnings (P/E) ratio of 13.4 to try to formulate the value of its shares over the next couple of years based on these forecasts.

Based on the expected EPS of 0.1p in 2026, the company’s shares should be worth 133.6p each. That’s a 31.2% rise from the current price.

With analysts predicting an EPS of 0.12p in 2027, the company’s shares should be worth 160.32p apiece. That’s a 20% rise from the 2026 expected share price, and a 57.4% increase from the current price.

Based on this simple analysis, Lloyd’s shares definitely look very compelling. But investors should bear in mind that this isn’t guaranteed and that there are many other variables to consider.

Not so simple

While the above analysis points towards the company’s shares enjoying a lovely future, there are also other aspects to consider.

Firstly, although its shares aren’t exactly expensive, compared to other banking stocks, they’re not exactly cheap. Here are the P/Es of some others:

• Natwest: 8.5
• Barclays: 10.5
• HSBC: 15.5
• Standard Chartered: 12.9

With its P/E of 13.4, only HSBC shares are more expensive than Lloyds shares. Therefore, they might not necessarily see such share price appreciation as illustrated above, as they’re already relatively expensive.

Also, it’s worth bearing in mind that the analyst forecasts above are only averages. Some analysts are predicting lower EPS growth.

Moreover, many events could occur that could hamper these predictions. For example, the tragic war in Iran could continue to wreak havoc on the global economy, which could hurt banks’ shares.

Still plenty of reasons for optimism

There are risks to holding Lloyds shares, but there are also reasons for optimism.

Looking at the company’s first-quarter results for 2026, we can see that underlying net income was up by 9%, statutory profit after tax was up by 37%, and EPS rose 0.7p to 2.4p.

What I like most is the margin expansion. Total costs only increased by 3%. These are good signs that the business is heading in the right direction.

Furthermore, savvy readers would have spotted above that analysts are also projecting margin expansion, as revenue, while still growing strongly, is outpaced by EPS growth.

If investors also have a positive outlook for the company, they may want to consider buying some of its shares.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Muhammad Cheema does not hold any positions in the companies mentioned.

The post Here’s how much I think Lloyds shares will be worth at the end of 2027 appeared first on The Twelfth Magpie.

Earnings are rising, margins are holding firm, and its capital position has strengthened again. This gives it more room for buybacks, which are broadly share-price supportive, and to increase dividends too — another shareholder reward.

So where ‘should’ the shares be trading and what sort of dividend compensation can investors expect while they are waiting?

Where’s the true value of the stock?

Price and value often diverge in the stock market. Price is simply the outcome of short-term trading, but value is rooted in the fundamentals of the business behind it.

For savvy investors, that gap is crucial. History shows that prices usually gravitate towards fair value over time, making the difference between the two an important driver of long-term gains.

Discounted cash flow (DCF) analysis remains a cornerstone of valuation for professional long-term investors. This is because it focuses on underlying business fundamentals rather than short-term market noise.

It estimates any stock’s fair value by projecting future cash flows for the business and discounting them to the present. Greater uncertainty in those forecasts leads investors to demand higher returns, increasing the discount rate.

Because analysts’ DCF modelling assumptions may vary, so might their fair value estimates. But using my own inputs — including an 8.5% discount rate — Lloyds’ shares look 49% undervalued at their current £1.01 price.

That places fair value around £1.98 — nearly twice today’s price. If markets continue to correct mispricing, this could be an outstanding buying opportunity if those DCF assumptions hold.

What about dividend income in the meantime?

The wait for the potential closure of that price-to-value gap is made a lot easier by regular dividend payments. And that combination is the real story in the stock, in my view.

Analysts expect Lloyds’ dividend yield to reach 4.3% this year, 5.1% next year, and 5.9% the year after. Those are comfortably above the FTSE 100 average of 3.1%. That said, such payouts can go down or up over time, due to share price and annual dividend changes. 

A £20,000 holding based on the forecast 5.9% as an average — and with dividend compounding used — would make £16,028 in dividends after 10 years. And after 30 years, this would have risen to £96,909.

A risk here is a sharper‑than‑expected rise in loan impairments that could slow earnings. And it is these that drive dividend and share price gains over time. Another is any tightening of regulatory capital requirements that might do the same.

However, analysts project Lloyds’ earnings — the key driver of share price and dividend rises over time — will rise by a strong 9.9% a year to end-2028.

My investment view

The forecast strong earnings growth should drive major rises in Lloyds’ share price and its dividend, in my view.

Even if the valuation gap closes just part of the way towards fair value, long‑term investors could see meaningful price gains on top of the income stream.

Unfortunately in my case, I already own two stocks in the same sector — HSBC and NatWest. Adding another would unbalance the risk/reward profile of my portfolio.

However, I have my eye on other deeply undervalued stocks that also deliver high yields, in other sectors.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Simon Watkins owns shares in HSBC and NatWest.

The post Lloyds shares look cheap around £1— but are investors overlooking the real story in the stock? appeared first on The Twelfth Magpie.

Lloyds has another trick up its sleeve that I think could boost its shares, if rumours are correct. It’s an unconventional one, but the bank reportedly thinks it could bring huge rewards: the shuttering of its 174-year-old brand, Halifax.

Why is Lloyds considering the move? And what benefits could the move bring?

Makes sense?

Halifax has been going strong since 1852, when it began accepting deposits from savers and offering home loans in the North of England. It officially became a bank in 1997, and was acquired by Lloyds following the great financial crisis in 2009.

Its rich history means it’s one of the most recognised names on the high street. So why might it be going the way of the dodo?

Well, for one, the high street is becoming less and less important for the banks. Digital banking is the future as people change the way they bank. And traditional lenders are happy to lean into this to cut costs. Lloyds announced it was shutting another 95 sites between May 2026 and next March, adding to 49 closures already announced by October.

Hundreds of Lloyds, Halifax, and Bank of Scotland-branded sites have been closed in recent years. The group’s customers can also access service in any branch regardless of the brand. In this respect, then, the demise of Halifax might not be that seismic. Savers and borrowers will simply have different branding on the top of their letters and on their apps.

The second reason Halifax could be dropped is that the brand simply isn’t as strong as the Lloyds one. Consolidating could help strengthen the bank’s market presence, cut out product duplication, and strip out further costs.

Time to buy Lloyds shares?

On balance, I see the move to scrap Halifax as a net positive. And especially as focusing on the Lloyds brand could help it fight back more effectively against the challenger banks. The bank could announce its intentions as soon as next month’s strategic review.

As a keen observer of the FTSE bank, I’ll be interested to see what other tricks it has up its sleeve. But unless it has something very special in the pipeline, I won’t be buying Lloyds shares for my portfolio.

In my view, the impact of any brand streamlining could be minimal, as challenger banks raise investment in their own marketing and expand their product ranges. This is a long-term threat that makes me fear for all the high street banks.

In the meantime, Lloyds faces the risk of sinking loan demand and rising impairments as inflation accelerates, threats that are magnified by the weak state of the UK economy. I think there are much better FTSE 100 stocks to buy today.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post Will axing this 174-year-old brand boost Lloyds’ share price? appeared first on The Twelfth Magpie.

And that, to remind ourselves, has been a 32% rise in the past 12 months — and a stunning 103% over five years. But what might drive Lloyds shares in the near future?

Waiting for earnings

We’ll have to wait until near the end of July to get the next instalments in the high-street bank results story. We’re due first-half figures from Barclays on 28 July, then the same from Lloyds on 30 July and NatWest the day after. We won’t have HSBC‘s update until 4 August.

In the meantime, it seems likely it’ll be general market movements and any economic developments that might move the Lloyds share price. And maybe investors can take the quiet news period as an opportunity to do some long-term evaluation.

But where does the company see the rest of the year going? With its first-quarter update, the bank set the following for 2026 guidance…

• Underlying net interest income now expected to be greater than £14.9bn
• Cost-to-income ratio of less than 50% (including operating costs of less than £9.9bn)
• Asset quality ratio of approximately 25 basis points
• Return on tangible equity of greater than 16%
• Capital generation of greater than 200 basis points
• To pay down to a CET1 ratio of approximately 13%

What comes next?

That, to me, looks good enough to justify the current Lloyds valuation — with a forward price-to-earnings ratio of around 10. I don’t see it as likely to do much to the share price in the short term, mind.

But my fellow Twelfth Magpie writer Edward Sheldon noted an interesting development. AJ Bell recently reported Lloyds as its most-bought stock — based on a Financial Times story that Lloyds plans to move into US infrastructure and data centre investing.

Yes, that’s right — Lloyds could be getting on the AI bandwagon. Well, in a small way, at least.

That’s the kind of thing that could potentially push Lloyds shares up in the short term. In fact, the price has actually perked up in the last week. But Lloyds doesn’t seem likely to become a major player in financing AI infrastructure.

What should we do?

I won’t let this guide my investment decisions right now. Well, actually, the risk of entering such a new market puts me off somewhat. Still, it’s all still very speculative. And buying on speculation can lead to disappointment.

Whatever happens to Lloyds shares in June, I’m only looking at one thing. It’s the contrast of Lloyds’ upbeat forecasts against the UK’s tough economic outlook.

For me, my holding in Lloyds remains just that — a hold. The current valuation seems about right for my strategy and risk profile.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Alan Oscroft owns shares in Lloyds Banking Group.

The post Where might Lloyds shares go in June? Let’s ask the experts appeared first on The Twelfth Magpie.

According to online platform AJ Bell, it’s currently the most bought stock of all. That’s not so unusual, but the margin of victory is. It makes up a staggering 15.91% of buyers on the platform. The second-most-bought stock, Nasdaq-listed AI play Micron Technology, makes up just 2.18% of purchases. So how come Lloyds is suddenly smashing it?

Why is this stock in demand?

I instinctively checked out its latest results, but I didn’t get my answer there. Q1 figures landed a month ago on 29 April. They showed a pretty decent start to 2026, with underlying profit up 31% to £2bn, slightly ahead of expectations. 

Lloyds also continued its £1.75bn share buyback programme, purchasing £700m of shares during the quarter. Yet the market response was flat on the day. Why the delayed reaction?

I was wondering if those buybacks had anything to do with it. Lloyds made a big purchase of its own stock on Thursday (28 May). It bought 7.746m shares at around 101p each. Total cost: £7.8m. But it bought them from Goldman Sachs, not AJ Bell.

It may just be one of those things. The last week was pretty good for Lloyds shares, they climbed 2.93%. That compares to growth of just 0.18% across the FTSE 100. However, 21 stocks did better, so I’ll just have to throw up my hands and say I can’t explain the sudden rush. I’ll move onto my next question: were people right to buy Lloyds?

Should you buy it too?

I’m a fan of FTSE 100 banks generally. In fact I’ve bought two this month, but neither were Lloyds.

Instead, I went for HSBC Holdings and NatWest. Mostly because I didn’t hold them, and wanted to diversify. Also because they were cheaper and offered higher yields. But the main driver was that both had dipped around 5% after publishing disappointing Q1 results, reducing their valuations and reducing their dividend yields. Both have jumped since I bought them.

Lloyds faces challenges right now. It’s a UK-focused bank, and the domestic economy is struggling. This also limits its opportunity for finding new sources of business. I bet the board can’t help looking enviously at Barclays’ US investment banking operations, and HSBC’s massive opportunity in China.

Yet I still think Lloyds is a brilliant portfolio building block for investors wanting growth and income. And while the price-to-earnings ratio is higher than it was at 14.5, on a forward basis it’s just 10.1. The yield is forecast to hit 4.25% this year, then 5% in 2027.

I can see why investors sometimes go a little crazy about a long-term opportunity like this one, and think Lloyd shares are worth considering today. Sometimes it’s okay to follow the crowd.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Harvey Jones owns shares in Lloyds Banking Group, HSBC Holdings and NatWest Group.

The post Why have investors suddenly gone crazy over Lloyds shares? appeared first on The Twelfth Magpie.

Actually, the basic dividend yield is only one part of the puzzle here. And Lloyds’ shares have been a terrific investment for the last three years in both dividends and share price moves. And an investor prescient enough to reinvest dividends into the stock might now be looking at a yield creeping above the 8% mark. Let me explain.

The numbers

The following table contains the details of what would have happened to a £1,000 stake continually reinvested over the period. The calculations are based on historical data, but the exact times of reinvesting the shares might change the numbers a touch.

So what’s going on here? How did the dividend yield jump from less than 4% to above 8%? The ultimate reason is that it’s been a very successful few years for the company. Factors including higher interest rates worked in the bank’s favour and earnings have been growing. The share price more than doubled too.

Another point is the difference between dividend yield and forward dividend yield. The basic dividend yield tells us what was received in the last 12 months as a percentage. But for budding investors, the forward yield, which gives the next 12 months, is more useful. That’s why the first year was over 6%.

All told, an investor plumping for Lloyds’ shares three years ago would have nearly tripled their stake. But could it happen again?

Are Lloyds’ shares a buy?

There’s cause to believe the events of 2026 have dealt Lloyds a bad hand. The terrible conflict in Iran isn’t having just humanitarian consequences, but it will have worldwide ripples effecting inflation and the global economy. This could be a hammer blow to the banking sector. Lloyds’ share price is down 11% since February and was down 19% at the lowest point.

There might be one silver lining in this cloud, however. One of the reasons for Lloyds’ recent success has been higher interest rates, which allow more flexibility to increase margins. That the BoE was unable to bring the rate down to the 2% target (because of persistent inflation) has been a boon to banks. Therefore, the talk of interest rate rises due to the war may help while it hinders.

Only time will tell us for sure whether Lloyds can continue its excellent run. One thing is eternally true however. The dividend yield doesn’t always tell us the earnings potential for investing in a stock. And I wouldn’t be surprised to see a similar run in the future. I think it’s worth considering.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

John Fieldsend owns shares in Lloyds.

The post £1,000 invested in Lloyds shares 3 years ago is now worth… appeared first on The Twelfth Magpie.

Why were investors scrambling to buy the shares? Believe it or not, AI.

Lloyds is now looking at data centres

According to the Financial Times, Lloyds is shortly about to push into US infrastructure and data centre investing. In an article posted last Tuesday (19 May), it said that the company is planning to create a US infrastructure bank with a focus on large construction projects.

The article went on to say that Lloyds would take a relatively cautious approach to lending in the US by participating in syndicated loans. According to people familiar with the matter, the bank has no intention of taking on Wall Street giants like JP Morgan and Goldman Sachs who are leading data centre financings.

Nothing confirmed yet

Now, while this all sounds exciting, it’s worth pointing out that it’s all just speculation at the moment. Nothing has been confirmed.

And even if it does happen, it may not be a success for Lloyds. This was highlighted in the comments section of the FT article.

“Staid bank with mainly retail operations mainly in the UK pushes into big-ticket loans to infrastructure investors in another country. What could possibly go wrong?” wrote one reader. “Talk about stepping outside your competencies. Red flag,” wrote another.

Worth a look near £1?

Could the shares be worth a look anyway? Potentially.

Lloyds has been performing pretty well recently. For example, in Q1, net income was up 9% year on year.

Meanwhile, the valuation remains low. At present, the forward-looking price-to-earnings (P/E) ratio is under 10.

Adding weight to the investment case is the dividend yield. This currently sits at about 4.3%, meaning that the shares could provide a healthy income stream.

Three risks to think about

On the downside, this bank is quite narrowly focused. Ultimately, its fortunes are heavily tied to the UK economy and housing market today.

This is a risk. Let’s face it, the UK economy isn’t exactly a picture of health at the moment – the growth rate is very low and unemployment is rising (it recently hit 5%).

Another risk is competition from new players such as Revolut. It was recently awarded a full UK banking license, meaning that it can now compete with Lloyds in areas such as lending and deposits.

I should also point out that AI could be a major risk to Lloyds. If a lot of people end up losing their jobs to AI automation, the bank could be looking at heavy loan losses.

Are there better opportunities to consider?

Personally, I see more appeal in the diversified banks. I’m talking about names like HSBC, Barclays, and JP Morgan (I own some shares here).

These kinds of institutions have lots of different ways to make money. For example, they can make money via investment banking, securities trading, and wealth management, as well as regular banking.

Given their diversified operations, I see them as less risky than Lloyds. In my view, they’re worth a closer look.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Edward Sheldon owns shares in JP Morgan.

The post Lloyds shares have become the Footsie’s latest AI play appeared first on The Twelfth Magpie.

In fact, even with elevated interest rates and widening net interest margins, Lloyds’ shares have slipped almost 10% over the past month. And consequently, they’re now trading back below the long-coveted 100p price threshold to around 96p today.

The mood seems to be shifting. But is this a temporary blip? Or is the rally now over?

What’s going on with Lloyds?

Part of the recent weakness looks like simple profit-taking. After such a strong move higher, it’s normal that some shareholders want to lock in solid gains. Even more so, given that the rally occurred over a relatively short space of time.

Having said that, there are some more fundamental reasons for caution. Lloyds benefited enormously from rising interest rates. But that tailwind is less powerful today than it was in 2025. And while structural hedges have helped continue to bolster lending margins, these clever tactics are expected to stop being as effective as we enter into 2027.

In other words, margins look strong today, but they’re likely going to be harder to maintain.

At the same time, investors are watching the wider UK economy closely. Slower growth, higher unemployment, softer consumer confidence, and rising credit stress are all unwelcome for a bank with Lloyds’ exposure to mortgages, personal lending, and small business lending.

None of that means the story’s broken, but it does help explain why investor excitement has started cooling.

What the experts see

Despite these looming headwinds, the latest institutional research still shows a mixed but generally constructive view of the business.

Lloyds’ scale, its dominant UK banking franchise, and its ability to generate cash consistently even in a tougher environment allow its operations to be fairly resilient.

Analysts also like the fact that Lloyds remains highly focused on execution. Cost discipline, operational efficiency, and steady balance sheet management all support more healthy profits over the long run. And that could, in turn, open the door to steady, lucrative long-term compounding paired with a tasty growing dividend.

On the other hand, as previously mentioned, margin compression and economic sensitivity remain significant threats. Lower margins paired with lower lending volumes on the back of weaker economic conditions could cause profits to flatten or even reverse. And in that scenario, Lloyds’ shares could indeed have further to fall.

So what should investors make of all this?

Opportunity or pause?

Even after the recent pullback, Lloyds still looks like a business with plenty going for it. The market may be questioning the pace of the rally, but it isn’t questioning the bank’s core long-term trajectory.

That creates an interesting setup for May. If Lloyds keeps delivering on efficiency, credit quality, and cash returns, this dip could end up being a fantastic buying opportunity for patient investors. That’s why I think this bank stock deserves a closer look.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Zaven Boyrazian does not hold any positions in the companies mentioned.

The post Lloyds shares are down almost 10% in 1 month! Is the rally over? appeared first on The Twelfth Magpie.