Lloyds Share Price Doubling by 2027 Unlikely Despite Strong Growth
Lloyds Banking Group Plc (LSE:LLOY) has seen its share price more than double since the end of 2024, with an additional 31% gain over the past year. The bank's strong performance is driven by rising interest rates, which boost lending margins and profits. The Federal Reserve's recent rate hike and potential further increases by the Bank of England could continue benefiting Lloyds.
In the first half of 2026, Lloyds reported a 9% rise in net interest income to £7.3bn and a 23% surge in pre-tax profits to £4.3bn. Management expects net interest income to exceed £14.9bn by the end of 2026, with the loan book growing by £10.4bn. However, higher interest rates also pose risks, such as increased loan impairments and reduced demand for credit.
Impairment charges rose 39.4% to £616m in the first half of 2026, highlighting the potential downside of rising rates. While Lloyds' loan book remains robust, continued increases in impairments could become a concern. For the share price to double by the end of 2027, it would need to reach 218p, a target that seems ambitious without a major earnings catalyst.
Analyst Mark Rogers suggests Lloyds could be a solid long-term holding, though a near-term doubling in share price is unlikely. The bank remains a promising opportunity in the UK banking sector, but investors should weigh both the benefits and risks of higher interest rates.