Analysts were split on the outlook for Lloyds Banking Group PLC (LSE:LLOY), which on Wednesday hiked its dividend and profit forecasts.
This two-way pull was reflected by the share price which was more or less static at 45p.
Credit Suisse tweaked up its price target for Lloyds by 1% to 72p in the wake of the black horse bank’s interims.
In a note to clients, it said: “Lloyds upgraded its return on tangible equity guidance to 13% for the year, and the discussion on the conference call gave us more confidence that the medium-term targets will likely be revised up with the full-year results subject to the rates outlook remaining resilient at the time.
“We also think a benign asset quality message and expectation of surplus capital at the end of the year will also be taken well by the market given the weakening economic environment and increases our confidence in a new £2bn buyback programme with full-year results.”
RBC Capital, by contrast, was far less enamoured of the results, which showed pre-tax profits were steady year-on-year at £2.04bn, but well ahead of the market consensus of £1.6bn ahead of the figures for the six months to June 30.
The Canadian investment bank said it was ‘underwhelmed’ by the investor day that followed the company’s interims.
“Lloyds’ growth drivers do not appear to be game-changing and, if we are honest, we were already assuming the bank was developing them as part of their existing strategy,” RBC said.
“We get that the story is about augmenting long-term shareholder returns. But there is a lot of execution risk…to wade through before those returns come to fruition.”
While the bank upgraded its price target to 45p from 42p, it has retained its ‘underperform’ recommendation.