£10,000 invested in Lloyds shares on 7 April is already worth…

Lloyds Banking Group (LSE: LLOY) shares suffered from President Trump’s first tariff announcement on 2 April. They plunged in just a few days to hit a low on 7 April of 60.8p.

What’s Lloyds, a fully UK-focused retail bank, got to fear from US import restrictions? Well, banking and other finance stocks tend to fall across the board in the face of any economic threats. And this was definitely one of those.

We’re now seeing the US administration backtracking from all-out trade war. And since the fall, the Lloyds share price has rebounded by a very nice 19% as I write on 24 April. That’s enough to turn £10,000 into £11,900 in just 17 days.

Missed the chance?

I’m not going to advocate chasing day-to-day timing here. But I’ve learned one thing over the years from seeing ups and downs like this. When an investor is bullish about the long-term value of a stock, short-term dips can often provide great buying opportunities. Providing the dip isn’t caused by something the company has done, that is.

Dips can be especially profitable when sentiment is otherwise behind a stock. And with Lloyds shares up over 30% so far in 2025, I’d say that’s the case here.

But what if nobody had blinked in the tariff battle? If the world really did plunge into recession? And if that really did hammer bank profits? Politicians might often be self-assured and stubborn. But I can’t see any government throwing its economy in the trash like that.

What about Lloyds?

Now we’re past the dip (maybe, at least for now), are Lloyds shares no longer a potential buy? Or should we still consider them cheap enough to load up?

For me, as always, that comes down to fundamental valuation and where we think it’s going in the long term. The price-to-earnings (P/E) ratio is a fairly crude measure, but it can be handy for comparing like with like. Right now, Lloyds is on a forecast P/E of a bit over 11 for 2025.

I’d usually consider that probably about right. Except, we’re looking at earnings growth forecasts that could drop it to only seven by 2027. That starts reminding me of pandemic-era valuations, and it looks too cheap. Especially when we include a dividend yield predicted to hit 6.4% in the same timescale.

The elephant in the room

But we can’t ignore the car loan mis-selling case. And it looks like it’ll probably be another two or three months before we hear the verdict.

Does that mean I really am talking about timing the market? In a way, yes. Like any other investing rule, ‘Don’t try to time the market’ isn’t an unbreakable one. We know an event is going to happen, an event that could have an impact on Lloyds, and the market will almost certainly respond one way or another.

Optimists might consider buying Lloyds shares now. But for those who don’t want the risk, it’s perfectly fine timing our decisions until after the event. I’ll hold for now.