Lloyds Banking Group PLC (LSE:LLOY) shares are good value and have been unfairly tainted by worries over the health of the UK mortgage market, according to Credit Suisse.
The absence of a buyback announcement with July’s interim results has also weighed on the share price, but CS expects a GBP1bn buyback with the full year numbers while a third quarter update should reassure on the mortgage situation.
That makes the relative weakness a buying opportunity says the Swiss bank, which has upped its forecast for earnings this year due to an expectation of reduced bad debt provisions with lower mortgage applications already priced in.
Lloyds current valuation is attractive for a stock where CS expects positive underlying EPS (earnings per share) revisions.
‘Outperform’ is the investment rating with a 61p price target.
Shares rose 2.2% to 45.8p.