Lloyds Banking downgraded to Underweight from Neutral at JPMorgan

JPMorgan analyst Raul Sinha earlier today downgraded Lloyds Banking (LYG) to Underweight from Neutral with a price target of 42 GBp, down from 56 GBp. With the scenario of further rate hikes “well into restrictive territory now on the table,” the probability of a hard landing for the U.K. economy is higher, the analyst tells investors in a research note. The firm now expects earnings cuts for the U.K. banks to intensify with risks to capital return and asset quality. It remains cautious and continues to see domestic U.K. banks underperforming the broader sector. As such, JPMorgan moved to a relative Underweight on Lloyds while maintaining a preference for Barclays (BCS).