The Lloyds Banking Group (LSE: LLOY) share price barely changed after the bank said it would set aside a further £800m to cover the costs of a car loan mis-selling case – even though the total provision now stands at £1.95bn.

Instead of lowering price targets, analysts are as bullish as ever. And this comes after Lloyds shares have already stormed up 50% in 2025.

Ambitious price targets

Redress from the Supreme Court case is less burdensome than I expected. The potential number of claims may have increased. However, it appears that the payout for each case will be smaller than feared. It certainly justifies my decision to hold off.

Speaking of bullish analysts, Jefferies raised its Lloyds share price target from 103p to 105p on October 15 – following the latest news.

That’s 27% above the price at the time of writing. It would be enough to turn £5,000 invested today into £6,330. As usual, estimates have no specific time scale, but brokers’ goals are usually relatively short-term.

Follow this example?

Will other analysts also raise their targets? We’ll have to wait and see. But Morgan Stanley already has a 100p sticker on Lloyds shares, with Goldman Sachs setting the price at 99p. This would be enough to turn £5,000 into very close to £6,000.

Now it’s time for a confession… I choose prices near the top shelf. However, I think it has its justification, because they are among the newest ones.

Currently, the average price target for Lloyds shares is 91p. However, the downward biased estimates that shift the average down are mostly older.

Even a mid-level of 91p could mean a return of £5,400 on today’s £5,000 invested. A yield of 8.5% in a relatively low period of time is a pretty decent return in my opinion, especially if boosted by a forecast dividend yield of 4%.

Building an image

I have a few thoughts on both broker forecasts and Lloyds shares themselves, so let’s start with the former. I would never base an investment decision solely on forecasts.

Lloyds’ price-to-earnings (P/E) ratio is forecast to hit 12 this year, falling to 7.6 by 2027 based on prospects for sturdy earnings growth. A dividend yield of 4% is nothing special, but if analysts are right, we can expect it to raise to 5.7% by 2027.

Individually, these measures look good, although they are very uncertain. But added to my analysis of the company’s accounts and management prospects, they helped me build my own picture. Every little bit helps.

My summary

I’m a little cautious about sentiment. When a company’s shares enjoy the level of optimism we currently see at Lloyds, they can be pushed too high.

I also believe that the Lloyds share price is benefiting from continued high interest rates – and this still has to be a relatively short-term issue. Both can backfire on the stock

Oh, and dividend yields are much more attractive these days. But with all this in mind, Lloyds remains a sturdy choice for me… and I might even buy some more.