The Lloyds (LSE: LLOY) share price has been on a tear recently as a robust first-quarter end result has helped propel the corporate’s valuation greater.

With the banking large’s valuation hitting recent 52-week highs final week, I believed I’d contemplate whether or not there’s nonetheless worth left on the desk for traders in 2025.

Latest Lloyds share price motion

Shareholders can be very pleased with the corporate’s share price efficiency up to now this 12 months.

Lloyds’ valuation has elevated by 10% since early Might and reached a brand new 52-week excessive of 78.98p final week earlier than closing at 77.54p on Friday. As I write forward of the market open on Might 26, that makes for a year-to-date acquire of over 40%.

One issue that has propelled the Lloyds share price to a 52-week excessive was its quarterly earnings replace earlier this month. The financial institution reported a statutory revenue after tax of £1.1bn and a 12.6% return on tangible fairness (RoTE).

That continues an upward revenue trajectory from the second half of final 12 months because the financial institution remained assured of hitting its 2025 and 2026 steering.

Valuation

All these current features imply Lloyds shares at the moment are buying and selling at a price-to-earnings (P/E) ratio of 12.6, which is broadly consistent with the FTSE 100 common.

The dividend yield sits at a good 4.1%, backed by a complete dividend payout of three.17p per share for 2024. That’s not the very best yield out there, however it’s above the Footsie common and comfortably lined by earnings.

That is additionally supplemented by a £1.7bn share buyback programme, which varieties a part of traders’ whole return.

For banks, the price-to-book (P/B) ratio is one other key metric. Lloyds presently trades at a P/B of 1 occasions, which is greater than some friends like Barclays (0.65) however under others like HSBC (1.1) .

My verdict

Lloyds seems to be in respectable form. The financial institution is worthwhile, well-capitalised, and returning money to shareholders via dividends and buybacks. Its valuation metrics counsel to me it’s neither a screaming discount nor overpriced.

After all, there are dangers to think about. The continued fallout from the motor finance scandal may result in additional provisions or regulatory scrutiny. There’s additionally the broader financial well being of the UK, which, if it heads south, may influence mortgage efficiency and profitability.

That stated, I feel the financial institution’s deal with price management and digital transformation may additionally present future avenues for progress.

Total, I feel the Lloyds share price displays a financial institution that’s performing properly in a difficult atmosphere. Whether or not it’s good worth on the present valuation actually is dependent upon the place the UK financial system is headed and the way properly the banking sector performs within the subsequent three to 5 years.