Lloyds share price continued its strong bull run on Friday, reaching the important milestone of 100p for the first time since September 2008. It has risen in the last seven consecutive months, the longest streak since 2012, and is up by 90% in the previous 12 months. So, will the rally accelerate in 2026?
Lloyds Bank’s business has done well
Lloyds Bank stock has been in a strong bull run in the past few years, rising from a low of 25.50p in 2021 to the psychological point at 100p. This surge has pushed its market capitalization to over $80 billion, making it one of the top banking groups in Europe.
The stock’s surge has coincided with the performance of other European banks like Santander, Société Générale, Deutsche Bank, and Commerzbank.
Its performance was also notable as it happened at a time when the UK economy is facing major challenges. Inflation has jumped, economic growth has slowed, and most recently, Rachel Reeves announced a series of tax hikes.
One major reason behind the Lloyds share price surge is that the company is about to conclude the motor insurance claims issue. It added £800 million in provisions tied to this remediation in the third quarter, bringing the total amount to £1.95 billion.
Another reason is that the Bank of England (BoE) has maintained rates at a higher level in the last few years. It slashed rates by 25 basis points in December to 3.75%, the third cut of the year.
Still, despite the cut, the yield of UK government bonds has held steady, with the 10-year remaining at 4.50% and the five-year remaining at 4%. Also, the management has entered into structural hedge programs intended to absorb low interest rates in the country.
Resilient revenue and profitability growth
The third-quarter results released last year showed that the company’s business continued doing well, barring the motor insurance charge. It recorded a statutory profit after tax of £3.3 billion in the third quarter, with its net income rising by 6%.
High interest rates and the performance of the other segment contributed to the performance. Its net interest income rose to £3.45 billion in the third quarter from £3.2 billion in the same period last year.
Also, the other income division made over £1.55 billion, up from 1.43 billion in Q3’24. This business includes its fee-generation segment and its real estate ventures.
Lloyds has slowly become one of the biggest landlords in the UK, with a £2 billion rental property portfolio with over 7,000 properties. It hopes to continue adding to this portfolio with the goal of getting to 43,000 properties by 2030.
Analysts tracking the company have a mixed outlook. For example, JPMorgan has set a target price of 102p, a few points above the current level. Jefferies and Royal Bank of Canada (RBC) are more optimistic and are expecting it to jump to 105p and 110p, respectively.
However, Citigroup and Shore Capital have set a target of 97p and 84p, respectively. These analysts cited the impact of interest rate cuts, elevated valuations, and potentially lower shareholder returns.
Lloyds share price technical analysis
The daily chart shows that the LLOY stock price has been in a strong bull run for months. It has jumped to a high of 100p, moving to the upper side of the ascending channel.
The shares have remained above the 50-day and 100-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) and the Stochastic Oscillator have continued rising.
Therefore, the most likely outlook is neutral. A move above the upper side of the channel will point to a continuation to more gains, potentially to the resistance at 110p and above.
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