One year ago, I penned an article on this website titled “By November 2026, £1,000 invested in Lloyds (LSE: LLOY) could turn into…”. On the upper end, I explained how £1,000 in Lloyds’ shares might turn into £1,319 over the following 12 months.
Bagging over 30% in a single year is bullish stuff. Was it really possible? A year later, and the answer to the question is revealed: yes, with a but…
What would £1,000 be now?
What would the £1,000 have turned into then? First, we need to account for dividends. Assuming buying in at the share price in November 2025 of 87p gives us a yield over the period of 4.6%.
The share price is a little trickier. Lloyds’ shares were enjoying a terrific few months, peaking at 117p back in August. That’s even higher than the highest price target across all analysts from when I wrote the article. That alone is enough to tell me Lloyds has been an excellent investment.
Putting it altogether in cash terms, the £1,000 turned into £1,407 when the share price peaked. The 40% gain inside a year blew the socks off even my most optimistic prediction! Not bad.
There’s a catch however. Lloyds’ shares have struggled a bit since that high. The sum total, as I write, would be £1,154 instead.
Either way you look at it, it’s been a decent year. So what’s in store for the next one?
Next year
The first thing that bears highlighting is that analyst ratings look just as good as they did last year, and in some cases a little better. We’ve got 18 analysts covering the stock – 13 have gone with Buy or Outperform and only a single one gives it the thumbs down.
To repeat the calculation I did above (using share price and dividend forecasts over the next 12 months), the consensus price target would turn £1,000 into £1,377 by November 2027. If the highest price target of 135p is reached then the £1,000 would snowball into £1,487 instead. Impressive stuff.
What next?
How likely is all this? Well, there seem to be more obstacles than there were a year ago. The recently introduced banking surcharge is one thing to be aware of. It amounts to a 3% tax on profits for 15 months though, which likely won’t move the needle all that much.
The economy’s a bigger issue. The UK’s growth has been downgraded recently on the back of higher inflation and higher interest rates. This could put the brakes on banks like Lloyds, which thrive in better economic conditions. On the other hand, the early signs are that recent economic strength has come on the back of artificial intelligence, and this might be a trend that continues.
The recent move to increase interest rates might help as well. Some predictions have us being at 4.75% within the year which should boost the margins of banks.
Ultimately, we won’t know what £1,000 in Lloyds’ shares will do by next November until we’ve already turned the clocks back for 2027. But I’d be far from surprised if the next year is another good one for the bank. It’s one to consider.
Should you invest £5,000 in Lloyds Banking Group Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie 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 Plc made the list?
John Fieldsend owns shares in Lloyds.
This story originally appeared on Motley Fool
