My gut feeling is that the share price won’t hit £1 in 2025. Why? There are a few reasons:
* The valuation looks pretty full right now. Currently, analysts expect earnings of 7.33p per share from Lloyds this year. That puts the bank’s P/E ratio at 12. For a domestic bank that has minimal exposure to higher growth areas of banking such as wealth management, investment banking, and trading, that multiple is high. Barclays and HSBC trade at 9.2 and 9.9 times this year’s forecast earnings. So, Lloyds is trading at a premium to these banks. Note that the average price target is 97p. So, analysts don’t expect to see £1 in the near term.
* Key/round numbers often act as a form of ‘resistance’ for a share price. This is technical analysis 101. I believe we’re likely to see that here with £1. What I think will happen is that near £1, a lot of investors will look to take profits. This will put pressure on the share price and stop it from breaching the £1 mark. It’s worth pointing out that Lloyds’ share price has risen a lot in 2025 – year to date it’s up 60%+. After that kind of gain, some profit taking is to be expected.
* The UK Budget (to be announced on 26 November) threatens to throw up a few negatives for UK banks. Recently, there has been talk of higher taxes on banks, which could reduce profitability.
* Those looking for income have many superior options today. Right now, Lloyds shares yield less than 4%.
Now, I’m not saying that Lloyds shares can’t keep rising in the medium term. I just think that £1 (more than 10% higher than the share price today) is unlikely in 2025.
