The Lloyds share price has drifted from recent highs but is within touching distance of the highest levels in over a decade. The company has enjoyed the higher interest rate environment, and key profitability metrics remain strong.
Lloyds’ rally in 2025 has been remarkable. Shares have shrugged off concerns about motor financing redress and powered higher despite a sluggish UK economy.
Many that were selling at 55p – the top of the range between 2022 and 2024 – will be kicking themselves. Lloyds results have proved to be strong, and worries about the UK economy haven’t wormed their way into the share price.
The company’s first quarter results revealed rising net income due to higher net interest margins of 3.03% – an 8 bps increase year on year. The resilience of Lloyds’ net income will have played a major part in the stock’s rally this year, and with interest rates remaining elevated, the party will likely continue, at least for the next quarter or two.
We get our latest insight into Lloyds’ financial performance when it reports half-year results on 24th July, and many will be asking: Should I buy Lloyds shares now?
From a technical perspective, Lloyds is forming a bullish flag, which suggests the stock has further to run. Technical analysts would argue the golden cross formed in February this year puts the bulls firmly in the driving seat.
However, there are some considerations on the valuation front. For years, Lloyds and other FTSE 100 banks traded at a discount to book value. Lloyds shares traded at around half of book value for a prolonged period.
Thankfully for long-term holders, Lloyds is now trading pretty much on par with its book value following a storming rally this year. But the higher price-to-book valuation may leave the stock vulnerable to any disappointment in upcoming results.
A trader may see an opportunity for Lloyds to attack recent highs in the run-up to results and enter a position with a tight stop loss. Long-term investors may find better value elsewhere.
The 4.2% dividend yield is an attraction, but it’s not as high as it has been and is on the verge of not being worth the risk of the stock pulling back.