Lloyds share price could hit 80p by 2025!

I Lloyds (LSE:LLOY)’s share price is 20% lower than the consensus of all analysts covering the stock. However, another commentator at Deutsche Bank believes the British lender is 46% undervalued, with a price target of 80p.

Why Lloyds may look down

In recent years, Lloyds has been overlooked for several reasons. Firstly, it is a very UK focused bank, most of its loans are UK loans. Investors will become familiar with the general issues affecting British stocks, particularly those closely linked to the British economy.

Second, it does not have an investment arm. Many large banks have investment and trading activities, and this provides a degree of diversification. In theory, this means that Lloyds is a riskier prospect than the likes Barclayswhich operates a large investment arm.

Then there is the wide transatlantic discount. UK-listed shares often trade at a significant discount to their American peers. Just look at this price-to-earnings (P/E) ratio. I used the data for 2026 because of the anomalies in the near term.

The difference is stark. Although UK banks may not trade in line with US banks for some time, due to factors such as the fast-growing American economy, many analysts suggest that the discount should not be as large as it is.

There’s a lot to digest here, but there’s reason to believe that Lloyds can trade at higher valuation multiples. Of course, there is the issue of mis-sold car finance, which could mean Lloyds faces a huge fine sometime in 2025.

Deutsche Bank’s top choice

Robert Noble at Deutsche Bank is on the UK bank, even after the depressing Labor budget in October. The analyst expects an improvement in mortgage rate growth as interest rates normalize over the medium term. He also prefers domestic UK banks for their predictable profitability and growing book value to their international competitors.

Therefore, Lloyds, a UK-based lender, was selected by Noble for this group. Although he recently lowered his price target from 83p to 80p, he remains the most bullish analyst at the bank. This gives the stock significant potential to inform in 2025.

The average price target among all analysts is currently 63p.

Priority for Lloyds

Investors should be aware of FCA investigations. RBC analysts suggest the final fine could rise to £3.9bn. It is also a business that is closely linked to the health and success of the UK economy. That may worry some investors.

However, the stock remains undervalued compared to its US peers. Combining the above P/E discount with the 5.1% dividend yield, it’s easy to see why some analysts think this stock is oversold.