A Lloyds Banking Group (LSE: LLOY) share price of 80p would imply an increase of greater than 10%. However what would it not say concerning the valuation?

Effectively, it could push the forecast price-to-earnings (P/E) ratio for 2025 up to 12. That’s not a lot under the long-term FTSE 100 common, and it won’t depart a lot security room for the present financial outlook. And that, in case anyone hadn’t seen, is just not the most effective it’s ever been.

It may drop the forecast dividend yield down to 4% too. However the dividend is what’s saved us Lloyds shareholders going by these troubled years. And the prospect of a low yield may rely towards the possibilities of reaching 80p.

However that is all with solely a short-term view, and dealer forecasts for the subsequent few years paint a significantly brighter image.

Earnings and dividend progress

Metropolis analysts assume Lloyds can develop its earnings per share (EPS) by 70% between the 2024 full 12 months and 2027.

Now, that’s nonetheless greater than two years forward, and that may be a very long time within the funding world. There’s probably loads of time for a inventory market crash in there. However on the similar time, who says we gained’t slot in decrease inflation and rates of interest plus a return to financial progress? It has to occur some day, absolutely?

Anyway, earnings progress like that might drop the P/E as little as 6.7 by 2027. And if we see that, I reckon we may simply cross an 80p share price alongside the way in which. It will solely decrease the 2027 P/E to round 7.5. So by then, who is aware of, Lloyds shares may need already smashed by 100p.

Oh, the forecasters see the dividend rising greater than 45% over the identical interval too.

Value goal

There’s one factor the Metropolis consultants aren’t doing proper now although. They’re not forecasting an 80p Lloyds share price. Effectively, not less than they’re not all doing so, with a consensus of simply 74p. That’s solely about 2.5% forward of the present share price on the time of writing. And it’s a bit off-putting for these of us hoping for higher.

To make issues worse, probably the most pessimistic estimate sees the price plunging as little as 53p. That will be a 36% fall!

However there’s just one dealer who thinks we should always promote, outnumbered by seven of the 18 I can discover who assume we should always purchase the inventory. And a kind of reckons we may see 90p quickly, by no means thoughts 80p.

Even with that wide selection of visions, I see worth in analyzing all of the opinions we will discover earlier than we make our choices. And use them to assist us change into higher buyers daily.

What is going to I do?

I do assume Lloyds may attain 80p if July’s half-time report says the suitable issues. However the uncertainty means I gained’t put any extra money on it. No, I feel I’ll stick to the vast majority of the forecasters and maintain.