Good afternoon daves. Only 7 minutes out though!! lol

From today's Share Mag;-

'UK retail banking shares are cheaper than they should be - according to Merrill Lynch.For a while now we have witnessed a sustained de-rating of UK banks which has punished all stocks across the board.Current market prices lead to two possible conclusions; either that the retail banking sector should be trading at an estimated 2005 p/e ratio of 6.8.representing a 45% discount to the present p/e of 12.2, or that Merrill's forecasts for next year are some 30% too optimistic.
Merrill has an aggregate 2005 p/e target of 9.9 for the largest domestic banks,reflecting 9.8 times for retail banking and 10.0 for the rest of the business.Assuming the latter target figure is right, that gives an estimated actual pe of 6.8 for the retail business.In such a scenario,one can pick up RBOS'retail division at only 5.5 times,Barclays retail and Barclaycard at 7.2 times and Lloyds retail business at 4.8 times.
On current pricing, the market is factoring in a 30% reduction in our 2005 retail estimates which we believe is highly unlikely.
With Barclays and RBS looking the most undervalued , it makes them their core picks.

Improving business momentum and stable credit quality.Merrill thinks the market has not yet taken into account the group's aim to fix the cost underperformance of its retail banking operations nor its ambitions for Barclays Capital,'This coupled with a low rating and increasing likelihood of more substantial capital repatriation into 2005 leaves the stock looking very attractive'

Target price 634p

Not doing the share price much good so far today though, is it.

druid , i have had lloyds for over 2 years now ,3.66 when i bought and i am still waiting to see 5.00 plus share price.


still a 500 plus divi a year helps .

Druid/Dave
Are you expecting the DOW to go belly up?
FTSE seems to have dropped back since earlier..

If I had to make a living on MAM's figures.....I'd go skint.
regards