Lloyds (LLOY) nearly destroyed itself in 2008 with its ill-considered acquisition of HBOS. Now, after more than two years of bailouts and struggle, the bank finally appears to be righting itself.
In our opinion, the outlook for Lloyds--while still not bright--finally has stabilised. While we don't expect Lloyds to earn the 20%-25% return on equity it once regularly garnered, we think the bank will generate a 9% ROE by 2013.
We are lowering our fair value for Lloyds by 20p per share as we lower our projections for trading and insurance earnings in response to the difficult environment.
Read the entire note and research report here.
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