Stock fact sheet · data as of
Lloyds Banking Group plc (LYG): fair value, margin of safety and Wheel Score
Financial Services · Banks - Regional · United Kingdom · ADR · Value
Is LYG undervalued?
At 5.47 (close of 16 Oct 2026), LYG trades 35% below the GLS average fair value of 8.37. That average comes from 8 models run on the latest filings, and 4 of them land above the current price. Margins of safety over 30% are the exception rather than the rule across the ~7,400 stocks we value each night, so the number earns Lloyds Banking Group plc the full Value points in the Wheel Score - and a closer look at what the market is pricing in.
The 8 models disagree widely: Graham Number gives 1.26 while DCF gives 21.98. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files LYG under Value: positive earnings at a P/E of 18 or less.
Nine valuation models for LYG
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 21.98 | +302% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 1.26 | -77% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 17.58 | +221% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 7.00 | +28% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 6.71 | +23% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 4.90 | -10% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | - | - | Eight years of compounded free cash flow: the price at which the business pays for itself; no value tonight |
| DDM | 2.35 | -57% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 5.21 | -5% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -57.41 | -1150% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 2.75 | -50% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is weak: LYG passes 4 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 4.7 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are thin or negative - ROIC 3.3%, ROE 9.8%, ROA 0.5% - with debt at 2.00 times equity and negative free cash flow.
The dividend yield is 3.88% at a payout ratio of 0%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold.
Institutional ownership scores 1/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 4 / 9 | ROIC | 3.3% |
|---|---|---|---|
| GLS Moat | 4.7 / 10 | ROE | 9.8% |
| Debt / equity | 2.00 | ROA | 0.5% |
| Free-cash-flow yield | 0.0% | Payout ratio | 0% |
| Institutions | 1 / 10 | Insiders · Congress | 5 · 5 / 10 |
Wheel Score 80: Prime
LYG scores 80 out of 100 on the Wheel Score, in the Prime band (80 and above), which fewer than one stock in twenty reaches on any night. The score blends five things a wheel trader checks before selling a cash-secured put: the margin of safety (Value, 25/25), Piotroski health (9/20), the GLS moat (7/15), the option premium on offer (19/20) and how easily the stock trades (20/20).
Implied volatility is 66% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (19 of 20) because volatility this high usually comes with a reason. Chain open interest is 32,901 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 37.9M shares a day on a market cap of $79.3B, with a beta of 0.94; the Stability part of the Wheel Score gives that 20 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 35% margin of safety | |
| Health | 9 / 20 | Piotroski 4/9 | |
| Moat | 7 / 15 | moat 4.7/10 | |
| Premium | 19 / 20 | implied volatility 66% | |
| Stability | 20 / 20 | 37.9M shares/day, $79.3B cap, beta 0.94 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
Lloyds Banking Group plc reports earnings on 29 Oct 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Banks - Regional
The 12 companies below are the closest to Lloyds Banking Group plc by market cap within the Banks - Regional industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| PNC The PNC Financial Services Group, Inc. | 215.80 | 196.12 | -10% | 61Fair | $86.1B |
| USB U.S. Bancorp | 56.26 | 86.70 | +35% | 90Prime | $87.7B |
| NU Nu Holdings Ltd. | 14.73 | 22.78 | +35% | 86Prime | $71.2B |
| DB Deutsche Bank AG | 32.86 | 82.93 | +60% | 80Prime | $61.7B |
| IBN ICICI Bank Limited | 29.44 | 219.42 | +87% | 45Weak | $105.7B |
| TFC Truist Financial Corporation | 45.57 | 84.17 | +46% | 85Prime | $55.7B |
| HDB HDFC Bank Limited | 23.53 | 953.25 | +98% | 90Prime | $120.7B |
| FITBI Fifth Third Bancorp | 25.36 | 45.99 | +45% | 39No options | $50.5B |
| MFG Mizuho Financial Group, Inc. | 10.22 | 1,012.85 | +99% | 88Prime | $128.5B |
| FITB Fifth Third Bancorp | 50.35 | 64.33 | +22% | 82Prime | $45.7B |
| BBD Banco Bradesco S.A. | 4.03 | 44.33 | +91% | 86Prime | $43.5B |
| BSBR Banco Santander (Brasil) S.A. | 5.59 | 22.36 | +75% | 71Good | $41.9B |
⚖ Compare LYG with 7 of them All Financial Services stocks →
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Start free See the Sunday ScanQuestions about LYG
Is LYG undervalued right now?
By the GLS models, yes: at 5.47 the stock is 35% below the average fair value of 8.37 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of LYG and what does it mean?
LYG scores 80 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for LYG?
8.37 per share as of 16 Oct 2026 - the simple average of the 8 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Lloyds Banking Group plc report earnings next?
The next earnings report is due on 29 Oct 2026 (before the open), 13 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does LYG have listed options, and how liquid are they?
Yes. The nightly snapshot found 110 listed contracts with 32,901 open interest across all expiries and implied volatility of 66% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.