As a shareholder, I suppose I’m a bit biased in favour of the Lloyds Banking Group (LSE: LLOY) share price.

At simply 53p, and on one other slide after 2024’s features turned tail in October, it simply seems too low to me. And who else thinks the identical? The present crop of analyst forecasts predict good days forward for Lloyds shares.

One among them, at Deutsche Financial institution, has even pinned an 80p goal on the shares.

Worth targets

If that comes off, it might imply a 50% achieve from right this moment. And it’d even propel Lloyds to the highest of the FTSE 100 chief board in 2025.

Not all brokers are fairly as optimistic as that although. Up to date price targets in the previous couple of months of 2024 have been largely within the vary of 58p to 62p. And the general dealer stance is mediocre, with only a slight sway to the Purchase aspect of issues.

The Metropolis isn’t wildly optimistic general. However the low finish of the goal vary is at 53p, so a minimum of no one’s predicting a Lloyds share price fall. And that lowball price is from early 2024.

Rising sentiment

The newer vary, previous to the Deutsche Financial institution replace, suggests the shares might achieve between 9% and 17%. If Lloyds achieves that in 2025 on high of paying a forecast 5.4% dividend, I’d charge it as a fantastic consequence.

And if dealer sentiment retains on enhancing (and so they’re proper), we would even do higher than that.

What wouldn’t it imply for the Lloyds share price valuation? An 80p price would give us a price-to-earnings (P/E) ratio of round 12.

That’s primarily based on earnings expectations for the 2024 yr simply ended, with outcomes due on 20 February.

Truthful price?

In my opinion that might be too costly proper now, in a yr through which UK financial institution valuations are nonetheless beneath strain.

Falling rates of interest, ought to the Financial institution of England cuts truly proceed in 2025, can be a bit double-edged. Sure, they might lower curiosity margins. However they’d certainly additionally increase mortgage lending. I’m not overly apprehensive about that.

However Lloyds’ involvement within the present automotive mortgage mis-selling investigation is a priority. The board has thus far put aside £450m for it. However pessimists counsel it may cost Lloyds up to £1.5bn.

I actually wish to see what the board says about it at FY outcomes time.

Future features

If earnings develop as forecast, even an 80p price goal might imply a P/E of solely 9.6 by 2026. And I reckon that might be a severely low cost valuation.

That’s, offering Lloyds will get previous its short-term threats, rates of interest get again to regular, and we see hints of financial progress. Not an excessive amount of to ask for, then.

Will we see a Lloyds share price achieve in 2025? I don’t share the 80p bullishness, not within the quick time period. However I’m cautiously optimistic a couple of modest enchancment.

I actually hope the price stays low although, so I can purchase extra shares with my dividend money.