If that doesn’t resonate, think of it this way: A ‘kitchen sink job’ is usually what the freshly arrived CEO does when a business is either failing or in need of a radical overhaul.
In the parlance, he or she throws everything barring the kitchen sink, all the bad news, write-offs etc, into the first announcements of the new tenure.
JP Morgan, in its latest note to clients, is suggesting that incoming Charlie Nunn has a far better inheritance than the departing António Horta-Osório, who was brought in to revive the fortunes of the black horse bank.
Back in 2011, when the Portuguese took over, Lloyds was part-owned by the government and still bearing the scars of the global financial crisis and the ill-judged (if coerced) takeover of HBOS.
“With Charlie Nunn taking over as the new Lloyds CEO in August, we expect a period of strategic reassessment followed by a new plan and investor update in February 2022,” said JPM in a note to clients.
“Despite a weakening mortgage market, Lloyds’ top-line recovery remains on track in our view, driven by the yield curve and consumer recovery.
“We believe that the Lloyds' management transition is unlikely to result in a materially negative reset of market expectations, which remain undemanding in the context of UK macro trends.”
JPM’s analyst pointed out that after the recent pullback, “Lloyds offers the highest upside in UK banks on our forecasts”.
It rates the shares overweight with a 60p price target, which represents a 42% premium to the current stock price.
The American bank’s top pick in the sector is Barclays (LON:BARC).