Lloyds Banking (LYG) AI Stock Analysis

• Market Cap: $79.02B
• Dividend Yield: 3.19%
• Average Volume (3M): 5.65M
• Price to Earnings (P/E): 18.0
• Beta (1Y): 0.77
• Revenue Growth: -20.94%
• EPS Growth: -18.71%
• Country: US
• Employees: 61,228
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.11
• Shares Outstanding: 14,721,436,000
• 10 Day Avg. Volume: 3,956,722
• 30 Day Avg. Volume: 5,650,427
• PEG Ratio: -0.48
• Price to Book (P/B): 0.74
• Price to Sales (P/S): 0.90
• P/FCF Ratio: -3.87
• Enterprise Value/Market Cap: 2.03
• Enterprise Value/Revenue: 4.26
• Enterprise Value/Gross Profit: 4.26
• Enterprise Value/Ebitda: 26.05
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $5.50 ▲(10.44% Upside)

Lloyds Banking's overall stock score of 71 reflects a solid financial foundation with strong profitability margins and a stable balance sheet. The technical analysis indicates bullish momentum, supported by positive earnings call sentiment. However, liquidity challenges and potential risks in mortgage margins and asset quality slightly temper the outlook. The stock's fair valuation and attractive dividend yield further enhance its investment appeal.

Positive Factors

Strategic Initiatives

Lloyds' focus on strategic initiatives is driving revenue growth, with a target of GBP 1.5 billion by 2026, indicating a strong commitment to innovation and market expansion.

Operational Efficiency

Lloyds' consistent cost-saving measures enhance operational efficiency, supporting margin sustainability and long-term profitability.

Dividend Growth

A 15% increase in dividends reflects Lloyds' strong cash generation and commitment to shareholder returns, enhancing investor confidence.

Negative Factors

Revenue Growth Decline

Declining revenue growth indicates potential difficulties in sustaining market position and competitive advantage, impacting long-term prospects.

Liquidity Challenges

Negative free cash flow highlights liquidity issues, which could limit Lloyds' ability to invest in growth opportunities and manage financial obligations.

Mortgage Margin Pressure

Pressure on mortgage margins may reduce profitability in a key revenue segment, affecting Lloyds' long-term financial health.

Lloyds Banking Business Overview & Revenue Model

Company Description

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom. It operates through three segments: Retail; Commercial Banking; and Insurance and Wealth. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal and small business customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, debt financing, and debt capital market services to small and medium-sized entities, corporates, and financial institutions. The Insurance and Wealth segment offers insurance, investment and wealth management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows brands. Lloyds Banking Group plc was founded in 1695 and is based in London, the United Kingdom.

How the Company Makes Money

Lloyds Banking Group generates revenue primarily through interest income, fees, and commissions associated with its various banking products and services. The main revenue streams include net interest income from loans and mortgages, which constitutes a significant portion of their earnings, as they charge interest on the money they lend. Additionally, the bank earns fees from account maintenance, transaction services, and wealth management. The Insurance segment contributes further revenue through premiums collected from policyholders. Furthermore, strategic partnerships with fintech companies and investment in digital transformation enhance customer engagement and operational efficiency, contributing positively to the overall revenue.

Lloyds Banking Financial Statement Overview

Summary

Lloyds Banking presents a mixed financial performance. The income statement shows strong profitability margins but declining revenue growth. The balance sheet is stable, with manageable debt levels and a cautious equity strategy. However, cash flow metrics reveal liquidity challenges, highlighting the need for improved cash management. Overall, the company remains solid but needs to address revenue growth and cash flow conversion to strengthen its financial standing.

Income Statement

Lloyds Banking showed a mixed income performance. The gross and net profit margins for 2024 were strong at 25.15% and 3.52% respectively, indicating efficiency in cost management. However, a revenue growth decline of 4.58% compared to 2023 suggests challenges in maintaining top-line growth. The EBIT margin remained robust at 100% due to the nature of banking revenue recognition. Nonetheless, the lack of EBITDA data limits comprehensive profitability analysis.

Balance Sheet

The balance sheet reflects a stable structure with a moderate debt-to-equity ratio of 1.77 in 2024, showing manageable leverage. The equity ratio at 5.04% and a return on equity of 9.67% suggest a cautious but steady approach to capital utilization. Cash reserves decreased significantly, impacting liquidity positions, but overall, the company maintains a solid asset base.

Cash Flow

Cash flow metrics highlight some concerns. The free cash flow turned negative in 2024, indicating cash management challenges. The operating cash flow to net income ratio was negative, showcasing inefficiencies in converting income into cash. Free cash flow to net income ratio was also negative, further emphasizing liquidity strains. This signals potential risks if cash flow management does not improve.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.61B	37.61B	33.95B	20.77B	18.71B	18.69B
Gross Profit	37.61B	18.60B	19.20B	16.05B	16.32B	15.13B
EBITDA	6.15B	9.40B	10.41B	7.18B	9.73B	3.96B
Net Income	4.65B	4.42B	5.46B	3.83B	5.78B	1.32B
Balance Sheet
Total Assets	919.28B	906.70B	881.45B	873.39B	886.52B	871.27B
Cash, Cash Equivalents and Short-Term Investments	64.22B	62.68B	78.11B	92.05B	76.57B	73.56B
Total Debt	85.44B	80.92B	93.67B	91.83B	91.84B	108.76B
Total Liabilities	872.41B	860.81B	834.09B	829.48B	833.37B	821.86B
Stockholders Equity	46.72B	45.72B	47.16B	43.67B	52.92B	49.18B
Cash Flow
Free Cash Flow	0.00	-8.76B	1.35B	18.16B	3.39B	24.27B
Operating Cash Flow	0.00	-4.39B	6.81B	22.01B	6.62B	27.17B
Investing Cash Flow	0.00	-7.69B	-9.82B	510.00M	-2.54B	-4.00B
Financing Cash Flow	0.00	-5.93B	-3.50B	-6.61B	-3.23B	-5.32B

Lloyds Banking Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LYG, the sentiment is Positive. The current price of 4.98 is below the 20-day moving average (MA) of 5.27, below the 50-day MA of 5.02, and above the 200-day MA of 4.38, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 65.06 is Neutral, neither overbought nor oversold. The STOCH value of 50.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LYG.

Lloyds Banking Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USB	76 Outperform	$86.32B	12.64	11.69%	3.77%	2.91%	33.77%
PNC	73 Outperform	$85.74B	14.04	11.31%	3.11%	1.79%	30.93%
LYG	71 Outperform	$79.02B	17.99	8.36%	3.19%	-20.94%	-18.71%
TFC	70 Outperform	$65.18B	13.57	7.98%	4.12%	22.02%	―
ITUB	69 Neutral	$78.85B	10.93	19.90%	9.77%	11.82%	3.41%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
MFG	64 Neutral	$97.53B	14.61	9.14%	2.31%	-2.84%	25.48%

Lloyds Banking Corporate Events

Lloyds Banking Group Expands Headroom Across Employee and Executive Share Plans in H2 2025

On 2 January 2026, Lloyds Banking Group filed its six‑monthly block listing return covering the period from 1 July to 31 December 2025, detailing movements in shares reserved for a range of employee and executive share plans. Over the half year, the bank increased the size of its Lloyds Banking Group Sharesave Scheme (2017) by 140 million shares while issuing around 14.1 million, leaving 164.5 million unallotted, and it added 27 million shares to its Share Incentive Plan while allocating 22.2 million, resulting in 57.1 million shares remaining available. The Executive Group Ownership Share Plan and the Deferred Bonus Plan (2021) saw no shares actually allotted during the period but retained enlarged or unchanged pools of 9.7 million and 70 million unissued shares respectively, while the Long Term Share Plan 2020 was expanded by 27.1 million shares to 108.1 million unallotted. The figures confirm that Lloyds is maintaining substantial headroom across its various equity-based compensation schemes, underlining its ongoing reliance on share awards to incentivise employees and senior management and signalling potential future dilution that investors may factor into their assessment of the group’s capital structure and remuneration practices.

The most recent analyst rating on (LYG) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Lloyds Banking stock, see the LYG Stock Forecast page.