Broker snap: Credit Suisse expects weak Q3 at Lloyds, target cut

27th Oct 2011 11:16

Credit Suisse has cut its target price for British bank Lloyds by 22.5% ahead of the firm's third quarter statement due on 8 November.The Swiss broker has increased its 2011 underlying loss per share expectations from 0.3p to 0.6p. Also, underlying earnings per share estimates have been cut from 3.5p to just 0.4p for next year and from 5p to 2.4p for the year after, "pushing back earnings recovery and reflecting structurally higher funding costs". As such, the target price comes down from 40p to 31p."Although we expect weak results, the numbers themselves are likely to be less important than any guidance given in terms of how the bank plans to address current market conditions, especially with regards to funding and deleveraging," the broker said.Credit Suisse kept hold of its neutral recommendation.Nevertheless Lloyds' shares were 6.69% higher at 36.54p at 12:03 on Thursday, joining in with the post-Eurozone deal rally, however the rise was not as pronounced as banking peers Barclays and Royal Bank of Scotland, which were up 12.2% and 8.2%, respectively.BC