The Lloyds share price (LON:LLOY) has suffered terribly since the onset of the coronavirus crisis, having more than halved since the beginning of 2020.

The writing of a letter by the Bank of England to UK banks effectively instructing them to cease all unnecessary payouts, including ordinary share dividends and buybacks, was the final straw for the market and shares fell beneath 30p.

However, with most of the ‘bad’ news now currently priced into shares, there is the argument that the sellers have been shaken out, leaving plenty of opportunity for a share price recovery.

To make a case for entering Lloyds shares at current levels investors should refer back to the fundamentals of the company in 2019. This will provide a reference to where Lloyds’ underlying business should return to as the UK economic recovery takes place over the next 12-24 months.

One should note that the much touted ‘V-shaped recovery’ to the coronavirus crisis in the early days of the spread is unlikely to happen due to the structural changes to the employment market.

Sharp increases in unemployment across the globe means the recovery will be slightly more protracted. Nonetheless, animal spirits will return and this will untimely drive Lloyds’ operations back up to prior levels.

Lloyds share price

Highlighting the opportunity for investors at current levels is the valuation of Lloyds shares based on historical earnings.

Lloyds net profit was £3 billion in 2019 meaning at 28p, Lloyds is trading at a 6.5x  earnings multiple.

However, it is entirely feasible that Lloyds profit is completely wiped out in 2020 making PE ratios utterly useless to judge Lloyds in 2020.

The reduction in interest rates by the Bank of England in an effort to support the economy will have an impact on Lloyd’s net interest income so investors should expect this to reduce earnings while rates remain low.

In addition, banks including Lloyds are providing payment holidays while ceasing the provision of mortgages which will also hit revenue.

Investors should look past 2020 and to the period when the economy has been resuscitated. This is where the value in Lloyds current share price lies as this is when earnings return and will make 28p look cheap. It is also the period that Lloyd will start paying dividends again.

With a PE Ratio of 6.5x historical earnings Lloyds shares are too hard to ignore given the potential for recovery, notwithstanding heightened volatility while we wait.

The Lloyds share price was 28p in morning trade 3rd April.