Lloyds“(LSE: Lloy) The price of shares increased by 47% compared to one April annual turnover of 49 pence.

This may be disgusting for some investors who believe that much more can not enhance in the near future. Others can see this as a sign of an insurmountable stubborn rush and want to jump on shopping fashion.

In my opinion, the former trader of the investment bank and the long -term private investor is not helpful in choosing the shares. The main concern for the price of the action is whether it has any value in it.

Was there the remaining value in the price?

Lloyds is aimed at an exaggerated part of 10.8 price to profit compared to the average competitor 8.9.

This group includes Barclays at 8, Nestwest at 8.7, HSBC at 8.8 and Standard charter at 9.9.

The same applies to his 0.9 price ratio to the book compared to the average peer of 0.8. However, in the price of sale it seems that it is quite priced at 2.4-so as the average competitive group.

However, the next photo results from my assessment where its price should be, based on future cash flow. Estimates of consensus analysts are such that Lloyds’ earnings will enhance by 13% each year by the end of 2027.

Considering this in the data of other analysts and my discounted cash flows show that Lloyds is currently underrated.

Therefore, the fair value of the shares is 1.36 GBP, although they can lower or higher.

What is the basic business like?

I thought that the results of Lloyds 2024 released on February 20 were essentially delicate, although there were some positive news.

On the other hand, the income of net interest (Nii) dropped by 7% year on year to 12.845 billion GBP. This is money earned on a difference of interest on loans granted to deposits.

The continuation of Niia remains a key risk for Lloyds in the future, taking into account the still worn interest rate trend in Great Britain.

One of the positive factors in the annual results was that the income of non-nii increased by 9% to 5.597 billion GBP. This reflects Lloyds’ efforts to replace more and more interest based on business fees.

In general, however, the base profit dropped by 19% to 6.343 billion GBP – well below the analysts’ estimates of 6.7 billion GBP.

Will I buy shares?

I focus on actions that pay 7%+ dividend to be able to live and reduce my working obligations. Lloyds currently gives only 4.4%, which is too low for me on an investment basis.

On the basis of growth growth, it looks too risky for me. His efforts to transfer focus from business based on profitability look less convincing than other banks that I already have-HSBC and Natwest. They also look like I’m at least as underestimated as Lloyds.

Another earnest risk of Lloyds is the potential cost of claims arising from the arrangements regarding the Commission for Automotive Finance in Great Britain. The results of 2024 reflected the next decision on this – 700 million GBP to add to the previous 500 million GBP.

Nevertheless, I think it is not to say now whether this is enough, taking into account the range of variables.

In addition, the risk of variability resulting from the price of 1 GBP. Each penny here constitutes 1.4% of the whole value of the shares!

To sum up, I can’t come up with any good reason why I buy shares.