Lloyds share price continued its strong bull run this year, and is now hovering at its highest level since September 2008. It has jumped in the last 12 consecutive months, and is up by 430% from its lowest level in 2020.
This surge has brought its market capitalization to over $80 billion, making it the 14th biggest company in the UK. Still, technicals suggest that the stock may pull back soon.
Why the Lloyds share price has soared
Lloyds Bank stock price has been in a strong uptrend in the past few months, mirroring the performance of other British banks. Barclays’ stock has jumped by nearly 80% in the last 13 months, while NatWest’s has soared by over 60%.
Other European banks like Unicredit, Societe Generale, and BNP Paribas have been in a strong uptrend in the past few years.
Lloyds Bank has done well as the company’s growth has held steady despite the ongoing growth slowdown in the UK, which is now going through a period of stagflation. Stagflation is characterized by a period of high inflation and slow economic growth, with a recent report showing that the economy contracted by 0.1% in October.
Lloyds share price has also done well as investors anticipate the ending of the motor insurance crisis after last year’s Supreme Court ruling. The company announced £800 million charge for motor finance commission, bringing the total amount to over £1.7 billion.
The most recent results showed that Lloyds Bank’s business made over £3.3 billion statutory profit after tax compared to the £3.8 billion in the same period a year earlier. The decline was because of the motor insurance charge.
Additionally, the management boosted the forward guidance. It now expects that its underlying net income to be £13.6 billion and its return on tangible equity to be 12%.
READ MORE: Top 3 reasons to buy Lloyds Bank shares
Lloyds Bank has continued to reward its shareholders through its buybacks and dividends, a process that will continue because of its capital ratio. It ended the last quarter with a CET1 ratio of 13.8%, which it expects to fall to 13% this year.
Lloyds executed a £1.75 billion in share buybacks in 2025 and has continued to pay a dividend, with its dividend yield rising to between 4% and 5%.
Still, the main concern about Lloyds is that it has now become a bit overvalued. Its price-to-earnings ratio is 16, while the forward multiple is 12, which are much higher than its historical levels.
Looking ahead, the next key catalyst to watch will be its earnings, which will come out on January 29. These numbers will provide more information about its performance.
Lloyds stock price technical analysis
The weekly chart shows that the LLOY stock price has been in a strong bull run in the past few months. However, there is a risk that the stock will lose momentum in the near term.
For one, the Relative Strength Index (RSI) has formed a rising wedge pattern, which is made up of two ascending and converging trendlines. This means that the RSI will have a bearish breakout, which will happen when the stock retreats.
Similarly, the Percentage Price Oscillator (PPO) has formed a bearish divergence pattern. At the same time, the stock is much higher than the 50-week and the 100-week Exponential Moving Averages (EMA), meaning that it may go through a mean reversion.
Therefore, the stock may have a bearish breakout soon, potentially to the support at 90p.
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