A Quick Look at Lloyds Banking Group's EPS Forecasts
LONDON -- It's always worth keeping an eye on the earnings forecasts for your favorite companies, especially if you use forward price-to-earnings ratio to gauge when to buy and sell your shares.
You never know, if City brokers have been revising their projections of late, your investments may not be as cheap -- or expensive -- as you think!
Today I'm looking at the earnings per share forecasts for Lloyds Banking Group , the FTSE 100 high-street bank. All my figures are courtesy of S&P Capital IQ.
The consensus for 2012 is for earnings per share of 2 pence, which puts the 47 pence shares on a lofty forward P/E of 23.
The estimates also suggest earnings may rise to 4 pence per share for 2013 and then climb to 6 pence per share in 2014 before flattening off at that level the year after.
The data from S&P Capital IQ also indicates Lloyds Banking Group's revenues may struggle to reach the levels attained in 2011. They are expected to fall to 18.5 billion pounds and remain largely unchanged for three years. Revenues could then climb to 19.1 billion pounds in 2015.
All told, the forecasts aren't great, with earnings essentially predicted to go nowhere after 2014. But then again, that P/E of 23 looks like the market is hoping the forecasts may be too pessimistic.
Whether these projections make Lloyds Banking Group a buy, a hold, or a sell is, of course, up to you. To put the company's multiple into perspective, the FTSE 100 at 5,967 trades on a P/E of around 11.
If you already have Lloyd's in your portfolio, there are plenty of other great stocks out there to consider, too. Some of them are listed in our special in-depth Motley Fool report,"Eight Top Dividend Plays Held By Britain's Super Investor."
The article A Quick Look at Lloyds Banking Group's EPS Forecasts originally appeared on Fool.com.David Kuo has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.