Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Eyes Down for Lloyds Banking Group PLC (ADR) (LYG)’s Results

Page 1 of 2
LONDON — Lloyds Banking Group PLC (ADR) (NYSE:LYG) is due to announce its annual results on March 1. At the time of writing, Lloyds’ shares are trading at 54 pence – up 51% from a year ago compared with a 6% rise in the FTSE 100.

How will Lloyds’ business have performed in 2012? And will the results justify the spectacular performance of the shares?

Lloyds Banking Group PLC (ADR) (NYSE:LYG)Analyst consensus forecasts
I had a bit of a rant about analyst consensus forecasts in my preview of Royal Bank of Scotland Group’s results, which are also due to be released next week. You can read what I had to say in that article, but the gist is that, on some occasions, the consensus is all but meaningless.

RBS is a case in point, and the same is largely true for Lloyds. For what it’s worth, you can take your pick from the following earnings-per-share (EPS) consensus forecasts for Lloyds: 2.13 pence (Morningstar); 2.53 pence (Yahoo! Finance); 2.85 pence (Digital Look).

Tangible net asset value
I’d suggest you don’t pay too much heed to earnings when you look at Lloyds’ upcoming results, and concentrate instead on the tangible net asset (TNAV) per share number.

In my view, TNAV is the single most useful valuation number for banks at all times, but perhaps especially when they’re recovering from a financial crisis and earnings are all over the place.

The table below show’s Lloyds’ TNAV per share at the end of each quarter since last year.

Dec 31, 2011 March 31, 2012 June 30, 2012 Sept. 30, 2012 Dec. 31, 2012
58.6 pence 58.3 pence 57.4 pence 56.6 pence ?

In terms of valuation, at a share price of 54 pence, Lloyds is trading at a 5% discount to TNAV per share in the Q3 balance sheet date of Sept. 30. The TNAV is, of course, five months out of date now, so the updated number in the upcoming results will give us an improved handle on whether the shares are trading at a discount, at par or at a premium.

What else?
At the nine-month stage, Lloyds gave guidance for the full year on several target numbers that you may want to check have been met:

1). Net interest margin around 1.93%;

2). Cost base close to 10 billion pounds;

3). Impairment charge approximately 6 billion pounds; and

4). Non-core asset reduction about 38 billion pounds.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!