CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Lloyds earnings preview: Where next for Lloyds stock?

Article By: ,  Head of Market Research
July 22, 2022 3:59 PM

When will Lloyds release its earnings?

Lloyds Banking Group is scheduled to release its quarterly earnings on Wednesday 27 July before the market open.

Lloyds earnings consensus

Wall Street forecasts revenue will come in at $5.16B and expects $0.07 in EPS.

Lloyds earnings preview

Lloyds Bank is a leading British bank and is often seen as a barometer of the country’s economy; Unlike banks like Barclays and HSBC, Lloyds does not have any major international operations, providing a clearer read on the UK economy itself. In addition, the bank derives most of its revenue from retail and business banking; through Halifax, it is the biggest mortgage lender in the UK.

From a macroeconomic perspective, the bank may benefit from rising interest rates in the UK as the Bank of England seeks to curtail inflation. Generally speaking, banks generate more net interest income when interest rates rise, and this impact will be particularly salient for a consumer- and business-focused operation like Lloyds. That said, the recent rapid rise in rates risks slowing transaction volume in the mortgage market, so even if the company makes more per mortgage, it could still face headwinds from lower overall mortgage volume.

Outside of that, another factor that traders will be watching in this quarter’s earnings will be credit losses. Lloyds has historically focused on the prime+ portion of the market, suggesting that its loan book should be relatively resilient to worsening economic conditions. Analysts will be watching the company’s loan loss reserve for insight into how concerned executives are about the future of the UK economy.

Where next for Lloyds stock?

As the chart below shows, LLOY has been trending lower along with the broader market since peaking at the start of the year. That said, shares have recently bounced from support at their previous lows in the 41.00 area, signaling some optimism ahead of Wednesday’s results:

Source: StoneX, TradingView

Looking ahead, bulls will be watching to see if prices can break above the 100-day EMA in the 45.00 area to open the door for a more sustained rally into the upper-40.00s, whereas a break below support in the 41.00 area would be a bearish sign and open the door for continued weakness toward the year-to-date lows near 38.00.

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the market you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024