Lloyds Forecast: Price Firms in Push Towards 50p Ahead of Q3 Earnings
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- Lloyd’s share price booms amid UK’s positive economic projection.
- The BoE’s decision to raise interest rates should boost the banking sector.
- Positive development in the housing sector will strengthen LLOY shares.
The short-term and long-term forecast for Lloyds (LLOY) is bullish as the price is supported by both fundamental factors and a positive technical analysis backdrop.
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Lloyds fundamental forecast
Christmas displays have already begun to appear in shops. Longtime shareholders of Lloyds Banking Group (LSE: LLOY) will be wondering if there is anything they could ask for this year. Of course, they will have been delighted with the updated dividends. Still, a little improvement in Lloyd’s stock price would be nice, wouldn’t it?
Lloyds will release its third-quarter update on October 28, so what will we be able to learn from that?
According to Lloyds, the company reported a net provision of £333 million in the second quarter. The improvements in the economy contributed to this. Nevertheless, it’s too early to make any predictions based on the economy.
Additionally, the bank stated at that time that it was still “refraining from making management decisions regarding the Coronavirus, which is now close to £ 1.2 billion.” As a result, investors will look for even more improvement in impairment reduction. This trend could bolster confidence in the stock and lift Lloyds’ share price slightly if it can keep pace with the first half of the year.
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BoE to raise interest rates
The economic recovery is still on track but there are headwinds, as shown by the volatility in stock markets over the past few weeks. Unfortunately, talking heads in the City don’t elicit enough positives and/or negatives – there is no consensus emerging on where the economy is headed next
The inflation rate may reach 4% by the end of the year, according to some forecasts. Therefore, it is almost certain that the Bank of England will soon raise interest rates. Lloyds has suffered from the ultra-low interest rates that have been in place for a decade and more.
According to a growing number of analysts and market participants, the Bank of England may raise rates before the end of the year, possibly as soon as November. The likely rate hike will be beneficial for Lloyds because it gives banks more leeway on how much they can charge borrowers.
Real estate sector boom
Some are skeptical about Lloyd’s lease connection to Barratt Developments, and their concerns are understandable. Usually, banks don’t do this. However, Lloyds already occupies the top spot in UK mortgage lending, and it keeps its assets tethered to this market. This deal sounds good, but what impact will it have on Lloyds’ stock price?
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Back in October, Barratt released upbeat trading reports. It also avoided most supply chain problems in the current year, which began in July. Despite this, Barratt anticipates that construction costs will increase by 4-5% over the next year.
On November 11, we can expect trading news from Taylor Wimpy. The news could help both Lloyds and the housing industry. The numbers on mortgages and real estate prices may be positive.
Lloyds share technical forecast: Aiming for 50p
The Lloyds price found support below the 200-day moving average and surged sharply beyond all the key moving averages. The price managed to close above the 20-day moving average. However, the price is near the key resistance level of 50.00. The price is expected the level and consolidates gains.
The future of Lloyds stock?
Lloyds’ share price has been rising for many years, and it may simply move sideways. The price could even fall. However, if dividends remain high, the buyers will keep holding positions.
