The Lloyds (LSE: LLOY) share price has floated between the 40p to 45p range for what feels like an age. But after recently breaking the 45p barrier, I’m hoping this will provide it with some much-needed momentum to kick on.
I’m a shareholder, so I’m happy to have seen a 10% rise in the share price in the last month. As I write, it’s up 1% in 2023. The last 12 months have seen it rise nearly 6%.
However, it’s not all been plain sailing. In the last five years, Lloyds shareholders have endured a lot. From its pre-pandemic price of 64p, the stock has come tumbling down. It’s staged a recovery from its 2020 lows, but it’s nowhere near the levels seen years ago.
Nevertheless, that’s in the past. I’m more worried about where it’ll head in the next five years. Could it continue rising?
Breaking it down
The main reason for a lift in its share price has been positive investor sentiment. It’s now hoped that interest rates have peaked, and the Bank of England (BoE) will start cutting next year. With the base rate at 5.25%, markets predict it could fall a percentage point within the next 12 months.
That’s good news for Lloyds. Mortgage rates are falling as a result and this will no doubt provide the housing market with some stability. As the UK’s largest mortgage lender, this should offer the business a boost going forward.
As its price has risen, its dividend yield has fallen. But still, at 5.3%, I’m not complaining. Covered three times by earnings, I also think there’s room for growth. This is reflected in analyst’s forecasts, with some expecting the yield to hit up to 7% in the years ahead. Of course, it must be noted that dividends are not guaranteed.
My biggest issue with Lloyds is its close ties to the UK economy. Unlike many of its competitors, it has very little presence overseas. This makes it more prone to any blips in the domestic economy. It’s been predicted that we won’t see growth until 2025 at the earliest. And while sentiment has rallied with optimism surrounding interest rates falling, BoE Governor Andrew Bailey recently commented that there was “still some way to go” to bring down inflation.
That said, I love a bargain. And Lloyds shares look cheap. A price-to-earnings ratio of six places it comfortably below the FTSE 100 average. A price-to-book ratio of 0.6, with one being seen as fair value, also signals to me that the stock could present a buying opportunity.
My move
In all honesty, I’m not expecting much movement from the Lloyds share price in 2024. In fact, I’d imagine we’ll continue to see volatility.
But as a long-term investor, I’m not too bothered. I see Lloyds as a profitable bank with a low valuation. That’s a combination that draws me in. As long as cash permits, I’ll slowly be adding to my Lloyds position in 2024. The extra income I’ll earn from its meaty yield will tide me over for the time being.
The post Will the Lloyds share price continue to rise in 2024? appeared first on The Motley Fool UK.
Should you invest £1,000 in Lloyds Banking Group right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group made the list?
See the 6 stocks
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
Can Lloyds shares deliver 100% returns in 2024?
I think the Lloyds share price could be a value trap
Should I buy the cheap Lloyds share price for 7% yield in 2024?
Can these things help the Lloyds share price double in 2024?
Do I sell if the Lloyds share price hits £1 in 2024?
Charlie Keough has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
