Lloyds Banking Group PLC (LON:LLOY) shares can rise by a quarter, suggests broker Jefferies, which has just published a meaty share price target upgrade.
The US broker has now set 82p (from 67p) as its fair value mark as it believes the market generally is just too bearish on earnings prospects at the bank.
Rather than margins on lending dipping, Jefferies can see a small rise in 2018, while bad debt ratios may also be much better than forecasts.
Another bull point is the merger benefit between Lloyds’ consumer finance arm and recent acquisition MBNA UK.
The UK government’s holding is now below 5% and fourth quarter numbers due on February 22 should also be ‘clean’.
As well as the higher price target, Jefferies has stuck with its ‘buy’ rating.
Shares rose 1.7% to 66.01p.