Lloyds Banking shares fell by -3.1% during the day's afternoon session, and are now trading at a price of $4.33. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
a Very Low P/E Ratio but Trading Above Its Fair Price:
Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial products and services in the United Kingdom and internationally. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 15.92 and an average price to book (P/B) ratio of 1.78. In contrast, Lloyds Banking has a trailing 12 month P/E ratio of 12.0 and a P/B ratio of 6.43.
Lloyds Banking has moved 46.1% over the last year compared to 15.1% for the S&P 500 — a difference of 31.0%. Lloyds Banking has a 52 week high of $4.62 and a 52 week low of $2.56.
Exceptional EPS Growth but Negative Cash Flows:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $19,216 | $22,295 | $17,876 | $6,647 | $20,510 | $34,281 |
| Interest Income (M) | $2,921 | -$3,557 | $1,721 | $3,331 | $8,503 | $19,011 |
| Operating Margins | 15% | 6% | 7% | 19% | 8% | 6% |
| Net Margins | 4% | 6% | 11% | 22% | 13% | 13% |
| Net Income (M) | $781 | $1,368 | $2,020 | $1,476 | $2,654 | $4,477 |
| Depreciation & Amort. (M) | $1,358 | $1,334 | $1,582 | $1,186 | $1,572 | $3,426 |
| Diluted Shares (M) | 70,466 | 71,252 | 71,366 | 67,631 | 63,913 | 60,913 |
| Earnings Per Share | $0.01 | $0.02 | $0.02 | $0.02 | $0.04 | $0.06 |
| EPS Growth | n/a | 100.0% | 0.0% | 0.0% | 100.0% | 50.0% |
| Free Cash Flow (M) | -$431 | -$1,005 | -$101 | $9,961 | -$7,994 | -$4,393 |
| Total Debt (M) | $97,689 | $87,397 | $71,552 | $73,819 | $75,592 | $70,834 |
| Net Debt / EBITDA | 8.95 | 3.36 | -2.77 | -8.94 | -4.14 | 0.0 |
