FBR Capital Initiates Coverage on Lloyds Banking Group (LYG) with an Outperform

October 20, 2009 10:16 AM EDT

FBR Capital initiates coverage on Lloyds Banking Group (NYSE: LYG) with an Outperform rating. Price target 115 pence.

FBR analyst says, "We assign a 12-month price target of 115 pence per share, which suggests more than 25% upside from the current price and significantly more than the average price should Lloyds undertake a rights issue. The bank has suffered significant losses and pressures over the past two years, but we believe that if it can raise approximately £15 billion in a public rights issue, it will be undervalued based on 2012 normalized earnings and price/NAV. We believe that avoiding the Government Asset Protection Scheme (GAPS) is materially positive to shareholders, and we would advise participation in a Lloyds capital increase to avoid the (full) effects of GAPS and shore up the balance sheet."

To see more analyst ratings on LYG Click Here.

Lloyds Banking Group plc provides banking and financial services in the United Kingdom, the United States, and Europe.

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