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Lloyds‘ (LSE:LLOY) share price remains one of the FTSE 100‘s star performers. In January, it sauntered past £1 a share for the first time since 2008. And in August it hit its highest level so far in 2026, touching 117.9p per share.
Lloyds’ shares have now settled back a little. But at 111.5p per share, they’re 34.1% more valuable than they were 12 months ago. It’s meant investors have — with dividends included — enjoyed an explosive total return of 37.7%.
That’s better than the 22.6% total return the broader FTSE 100‘s delivered since last September. The question is: can Lloyds’ share price continue surging? And how much money could £9,999 worth of Lloyds’ shares generate 12 months from now?
Brilliant momentum
In recent weeks, Lloyds has released another forecast-beating trading update, news of which sent its shares to those 18-year highs.
To recap, the bank’s underlying pre-tax profit leapt 18.4% between January and June, to £4.2bn. This was 2%-3% better than analysts had expected.
Lloyds is benefitting from a favourable interest rate backdrop, with higher rates boosting margins. But that’s not why the bank continues to wow investors. Instead, it’s Lloyds’ strong execution (and in particular its brilliant cost-cutting programme) that’s allowing it to deliver those sector-best results.
Targets raised
Lloyds is confident it can keep the party going too. So much so, in fact, that in July it raised its return on tangible equity (ROTE) targets. These are now:
- 18% by 2028.
- Roughly 20% by 2030.
The bank’s planning to hit these targets by expanding its core services and moving into areas like wealth management, leveraging artificial intelligence (AI) to help it achieve £2bn worth of annual cost savings, and generating more income from its structural hedge.
And here’s the thing, some market experts reckon these targets are well within reach. Hargreaves Lansdown has even called the company’s targets “conservative“, noting that analyst consensus for 2030 ROTE is at 21.2%, already above Lloyds’ 20% goal.
If Lloyds can indeed exceed its ambitions, the impact on its share price could be explosive.
What do analysts think?
At the moment, City brokers are forecasting further juicy gains for Lloyds’ share price. The average price target among 19 analysts is 120.4p per share, suggesting 8% upside from today’s levels.
With projected dividends thrown in, the total predicted return is 11.6%. That’s lower than Lloyds’ shareholders have been used to. But it still suggests a healthy profit’s possible. At this rate, a £9,999 investment today would generate £11,158 12 months from now.
Yet, I’m not tempted to buy Lloyds’ shares today. Let me explain why.
Are Lloyds’ shares a buy?
My instinct is that much of the buzz around Lloyds is baked into its big share price. Today, its price-to-book (P/B) ratio is 1.5. That’s miles above the long-term average of 0.9.
At these levels, Lloyds will have to keep delivering almost flawless execution. And given the weak outlook for the UK economy, the problem of growing competition, and the threat of heavy misconduct charges, I think the bank may struggle.
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Royston Wild does not hold any positions in the companies mentioned.
This story originally appeared on Motley Fool
