Lloyds Banking Group shares see bullish analyst forecasts amid rising profits

Lloyds Banking Group has seen significant financial momentum, driven by rising profits and expanded net interest margins. Analysts from major institutions including UBS, Citigroup, Barclays, and Morgan Stanley have shown bullish sentiment, with several upgrading their ratings and price targets.

Financial results highlight strong performance, with pre-tax profits jumping 23% to £4.3bn in recent half-year reporting. A key driver of this stability is the bank's structural hedge portfolio, which allows the group to lock in higher interest rates for several years. The group expects structural hedge income to rise by more than £1.5bn in 2026 and by an additional £1bn in 2027.

Shareholder returns remain a central component of the bank's strategy. The company has engaged in significant share buyback programs, including a £1.75bn buyback and a subsequent £1bn program, alongside increased interim dividends. While a £2 share price is not projected within the next 12 months, the average 12-month consensus target sits around 122p to 125p.