Lloyds share price jumped by over 4% on Wednesday as British stocks rebounded, with the FTSE 100 Index rising by over 1.8%. It jumped to 96.10p, up by 10% from its lowest point in March. So, will the stock continue rising in April?
Lloyds Bank to publish its earnings in April
LLOY share price will be in the spotlight this month as it publishes its financial results on April 29th.
These results will come at a time when the UK economy is going through stagflation, which is characterized by slow economic growth and high inflation.
Data released on Tuesday showed that the British economy grew by 1.4% last year, even as it stagnated in the fourth quarter.
More recent data revealed that the UK inflation rose by 3.0% in February, higher than the Bank of England (BoE) target of 2.0%.
The UK’s inflation will likely remain at an elevated level in the coming months because of the ongoing Iran war. Crude oil prices have jumped to over $100, while British gas prices jumped by over 67% this year.
Therefore, the implication is that the Bank of England (BoE) will likely maintain a hawkish tone in the coming meetings. This explains why UK bond yields have jumped recently, with the 10-year rising to 4.8%.
A more hawkish BoE is bullish for Lloyds and other banks like Barclays and NatWest because it helps to boost the net interest margin (NIM). The bank will deliver its interest rate decision on April 30th.
Analysts expect the upcoming earnings to show that the company’s business continued doing well in the first quarter of the year. The average estimate is that the company’s revenue rose to over £4.98 billion, up from the previous £4.39 billion.
The most recent results showed that the company’s business did relatively well despite the motor insurance challenge. Its net interest income rose by 2% in the fourth quarter to £3.52 billion, while its other income rose by 2% to £1.59 billion.
Lloyds had an underlying profit of £1.9 billion, bringing its annual figure to over £6.7 billion. Its CET ratio dropped to 13.2% as the company continued returning cash to investors.
The company is benefiting from the soaring customer deposits, which jumped to £496 billion. Lending jumped to over £481 billion.
Lloyds share price technical analysis
LLOY stock chart | Source: TradingView
The daily timeframe chart shows that the LLOY stock price has retreated from the year-to-date high of 115p in February to a low of 87.46p in March. This retreat happened as the British stock market continued falling.
A closer look shows that the stock bottomed at the 200-day Exponential Moving Average (EMA). The stock has always rebounded whenever it moved to that average.
It has formed a falling wedge pattern and has already moved above the upper side. Therefore, the stock will likely continue rising, with the next key target being at 100p. A move above that level will point to more gains to the year-to-date high of 115p.
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