Deutsche Bank has nudged its target price up for Lloyds Banking Group PLC (LSE:LLOY) to 90p to 100p and kept its “buy” tag intact after a solid third-quarter showing.
The figures are not flashy, but they tell a reassuring story. Loans are up 4% this year, deposits 3%, a decent clip in a market where many banks are struggling to expand.
That balance sheet growth has prompted a small, 1% lift to Deutsche’s forecast for Lloyds’ net interest income, the core profit it makes on the gap between lending and borrowing rates.
More striking, perhaps, is the confidence in shareholder returns. Deutsche expects a 20% rise in the dividend per share next year and another £1.7bn share buyback when full-year 2025 results land, with more to follow in 2026.
It also thinks Lloyds can top its 15% return on tangible equity target for 2026, pushing towards 18% by 2028.
The fly in the ointment? Expectations are already lofty. Deutsche’s earnings forecasts are only 2% ahead of the market consensus for 2027, suggesting the good news is well priced in.
Still, for investors seeking a dependable play on the UK’s slowly healing economy, Lloyds looks to be holding the reins rather firmly.