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Investing.com - Kepler Cheuvreux upgraded Lloyds Banking Group Plc. (LSE:LLOY) (NYSE:LYG) stock rating from Hold to Buy on Thursday, while raising its price target to GBP0.97 from GBP0.79.
The upgrade comes as the bank benefits from a reduction in its risk premium following a favorable proposal from the Financial Conduct Authority (FCA) regarding the motor finance redress scheme.
Kepler Cheuvreux noted that Lloyds is also benefiting from a strengthening of the structural hedge yield, which is expected to lead to approximately 16% return on tangible equity (ROTE) in 2026 and around 17% in 2027.
The research firm stated it does not expect any further increases in motor finance-linked provisions for the banking group.
The new price target of GBP0.97 represents a significant increase from the previous target of GBP0.79, reflecting improved confidence in Lloyds’ financial outlook.
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