ClearBridge Global Value Improvers Strategy Includes Alphabet and Divests from Novo Nordisk in Q3
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 16 2025
0mins
Source: SeekingAlpha
Fund Performance: ClearBridge Global Value Improvers Strategy achieved positive absolute returns in Q3 but underperformed compared to the MSCI World Value Index due to specific holdings in industrials and energy sectors.
New and Exited Positions: The fund initiated new investments in Lloyds Banking Group and Alphabet, while exiting positions in Novo Nordisk, Coty, PT Bank Rakyat Indonesia, and Fiserv.
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Analyst Views on LYG
About LYG
Lloyds Banking Group plc is a United Kingdom-based financial services company. The Company provides a range of banking and financial services that are focused primarily on retail and commercial customers. The Company operates through three segments: Retail, Commercial Banking, and Insurance, Pensions and Investments. The Retail segment offers a range of financial services products to personal customers, including current accounts, savings, mortgages, credit cards, unsecured loans, motor finance and leasing solutions. The Commercial Banking segment serves small and medium businesses, as well as corporate and institutional clients, providing lending, transactional banking, working capital management, debt financing and risk management services. The Insurance, Pensions and Investments segment offers insurance, investment and pension management products and services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AI Turbulence Impacts Market Performance
- Increased Market Volatility: Last week, stocks in software, real estate, financial services, and logistics faced selling pressure due to concerns over AI-related disruptions, with the Nasdaq Composite falling 0.2% and a weekly loss of 2.1%, indicating market sensitivity to AI impacts.
- Consumer Spending Data Focus: This week's highlight will be the Personal Consumption Expenditures (PCE) report on Friday, which will provide insights into consumer spending in December and inflation trends, especially following last week's unexpected slowdown in the Consumer Price Index (CPI).
- Corporate Earnings in Spotlight: Walmart (WMT) is set to release its fourth-quarter earnings on Thursday, marking the first report under new CEO John Furner, making it a key indicator of consumer spending that the market is eagerly anticipating.
- Ongoing AI Impact: As AI tools' potential effects intensify across various sectors, software stocks like Salesforce (CRM) and ServiceNow (NOW) have seen significant declines, reflecting the market's heightened vigilance regarding AI disruptions, necessitating close monitoring of future industry developments.
See More
Lloyds Banking Group Reports Strong 2025 Financial Results
- Significant Revenue Growth: Lloyds Banking Group reported £1.4 billion in annualized additional revenues from strategic initiatives in 2025, showcasing strong diversified growth, with management projecting £2 billion by the end of 2026, surpassing the previous target of £1.5 billion, thereby boosting investor confidence.
- Increase in Net Interest Income: The bank's underlying net interest income reached £13.6 billion in 2025, reflecting a 6% increase year-on-year, with a banking net interest margin of 3.06%, up 11 basis points, indicating effective asset management in a rising interest rate environment.
- AI Value Creation: Lloyds reported that GenAI delivered around £50 million of value in 2025, with expectations of over £100 million in additional value in 2026 through the continued scaling of both agentic AI and GenAI, highlighting the company's forward-looking investments in technology.
- Stable Rating: Bank of America Securities reiterated a Hold rating on Lloyds on the same day, setting a price target of p110.00, reflecting a cautiously optimistic market sentiment despite the competitive potential of other AI stocks.
See More
Lloyds Banking Reports Q4 2025 Earnings Highlights
- Earnings Beat: Lloyds Banking reported a Q4 2025 GAAP EPS of 2.20p, exceeding expectations by 0.20p, indicating sustained profitability despite slight revenue shortfall.
- Revenue Growth: The fourth quarter revenue reached £5.12 billion, an 8.7% year-over-year increase, although it missed expectations by £10 million, reflecting the company's robust market performance.
- Dividend and Buyback Plan: The Board recommended a final ordinary dividend of 2.43p per share, totaling 3.65p for 2025, a 15% increase, while announcing a share buyback program of up to £1.75 billion, showcasing strong capital position.
- 2026 Guidance: For 2026, the Group expects underlying net interest income of approximately £14.9 billion, a cost:income ratio below 50%, and an asset quality ratio of around 25 basis points, demonstrating confidence in future financial performance.
See More
Lloyds Banking Group Shares Undervalued by 37.4%
- Stock Performance: Lloyds Banking Group's shares recently closed at £1.02, reflecting a 72.7% increase over the past year, yet a 4.8% decline over the last 30 days indicates a contradiction between short-term volatility and long-term growth.
- Valuation Analysis: The Excess Returns model estimates Lloyds' intrinsic value at approximately £1.63 per share, suggesting a 37.4% undervaluation compared to the current price, indicating that the market may not fully reflect its profit potential.
- P/E Ratio Comparison: With a P/E ratio of 17.27x, significantly above the banking industry average of 11.13x, this suggests that the market holds optimistic expectations for Lloyds' future growth, but it may also imply that the current share price is overvalued.
- Investor Sentiment: Simply Wall St assigns Lloyds a valuation score of 2 out of 6, reflecting a cautious market outlook on its future performance, prompting investors to be aware of potential risks and opportunities.
See More
Earnings Season Approaches: Analysts Downgrade Financial Stocks' EPS Estimates
- Analyst Sentiment Decline: As earnings season approaches, analysts have broadly downgraded earnings expectations for financial companies, leading to a decline in EPS Revision Grades for several stocks, reflecting weakened market confidence in short-term performance.
- Earnings Downgrades: Unum (UNM) and Block (XYZ) received EPS Revision Grades of D and D, respectively, indicating a pessimistic outlook from investors regarding their profitability, which may adversely affect their stock performance.
- Large Financial Stocks Struggling: Lloyds Banking (LYG) and UBS Group AG (UBS) received Revision Grades of D- and D, suggesting significant pressure on these large financial institutions regarding earnings expectations, potentially prompting investors to reassess their investment value.
- Market Focus: Companies like HDFC Bank (HDB) and Mizuho Financial (MFG) also faced negative revisions, with EPS Revision Grades of F and F, respectively, indicating a substantial decline in market confidence in these financial stocks, which may impact their future financing and growth capabilities.
See More
Lloyds Banking Group Plans 2027 Rollout of Tokenized Deposits
- Blockchain Application Prospects: Lloyds Banking Group successfully piloted tokenized deposits in December 2025, with plans for a full rollout by the first half of 2027, a move that could fundamentally reshape financial services in the UK, enhancing customer experience and accelerating transaction processing.
- Mortgage Processing Innovation: CEO Charlie Nunn stated that combining tokenized deposits with artificial intelligence could reduce mortgage processing times from weeks to days while eliminating intermediaries, significantly improving efficiency and lowering costs.
- Asset Tokenization Growth: In July 2025, Lloyds completed a landmark transaction with Aberdeen Investments, using tokenized money market fund units as collateral for foreign exchange trades, marking a significant milestone for regulated digital assets and driving rapid growth in asset tokenization.
- Convergence of Traditional Finance and DeFi: Lloyds' blockchain strategy indicates that traditional financial institutions are taking Web3 technology seriously, and the planned rollout of tokenized deposits in 2027 could serve as a template for modernizing retail banking, enhancing both efficiency and compliance in financial services.
See More
AI Turbulence Impacts Market Performance
- Increased Market Volatility: Last week, stocks in software, real estate, financial services, and logistics faced selling pressure due to concerns over AI-related disruptions, with the Nasdaq Composite falling 0.2% and a weekly loss of 2.1%, indicating market sensitivity to AI impacts.
- Consumer Spending Data Focus: This week's highlight will be the Personal Consumption Expenditures (PCE) report on Friday, which will provide insights into consumer spending in December and inflation trends, especially following last week's unexpected slowdown in the Consumer Price Index (CPI).
- Corporate Earnings in Spotlight: Walmart (WMT) is set to release its fourth-quarter earnings on Thursday, marking the first report under new CEO John Furner, making it a key indicator of consumer spending that the market is eagerly anticipating.
- Ongoing AI Impact: As AI tools' potential effects intensify across various sectors, software stocks like Salesforce (CRM) and ServiceNow (NOW) have seen significant declines, reflecting the market's heightened vigilance regarding AI disruptions, necessitating close monitoring of future industry developments.
See More
Lloyds Banking Group Reports Strong 2025 Financial Results
- Significant Revenue Growth: Lloyds Banking Group reported £1.4 billion in annualized additional revenues from strategic initiatives in 2025, showcasing strong diversified growth, with management projecting £2 billion by the end of 2026, surpassing the previous target of £1.5 billion, thereby boosting investor confidence.
- Increase in Net Interest Income: The bank's underlying net interest income reached £13.6 billion in 2025, reflecting a 6% increase year-on-year, with a banking net interest margin of 3.06%, up 11 basis points, indicating effective asset management in a rising interest rate environment.
- AI Value Creation: Lloyds reported that GenAI delivered around £50 million of value in 2025, with expectations of over £100 million in additional value in 2026 through the continued scaling of both agentic AI and GenAI, highlighting the company's forward-looking investments in technology.
- Stable Rating: Bank of America Securities reiterated a Hold rating on Lloyds on the same day, setting a price target of p110.00, reflecting a cautiously optimistic market sentiment despite the competitive potential of other AI stocks.
See More
Lloyds Banking Reports Q4 2025 Earnings Highlights
- Earnings Beat: Lloyds Banking reported a Q4 2025 GAAP EPS of 2.20p, exceeding expectations by 0.20p, indicating sustained profitability despite slight revenue shortfall.
- Revenue Growth: The fourth quarter revenue reached £5.12 billion, an 8.7% year-over-year increase, although it missed expectations by £10 million, reflecting the company's robust market performance.
- Dividend and Buyback Plan: The Board recommended a final ordinary dividend of 2.43p per share, totaling 3.65p for 2025, a 15% increase, while announcing a share buyback program of up to £1.75 billion, showcasing strong capital position.
- 2026 Guidance: For 2026, the Group expects underlying net interest income of approximately £14.9 billion, a cost:income ratio below 50%, and an asset quality ratio of around 25 basis points, demonstrating confidence in future financial performance.
See More
Lloyds Banking Group Shares Undervalued by 37.4%
- Stock Performance: Lloyds Banking Group's shares recently closed at £1.02, reflecting a 72.7% increase over the past year, yet a 4.8% decline over the last 30 days indicates a contradiction between short-term volatility and long-term growth.
- Valuation Analysis: The Excess Returns model estimates Lloyds' intrinsic value at approximately £1.63 per share, suggesting a 37.4% undervaluation compared to the current price, indicating that the market may not fully reflect its profit potential.
- P/E Ratio Comparison: With a P/E ratio of 17.27x, significantly above the banking industry average of 11.13x, this suggests that the market holds optimistic expectations for Lloyds' future growth, but it may also imply that the current share price is overvalued.
- Investor Sentiment: Simply Wall St assigns Lloyds a valuation score of 2 out of 6, reflecting a cautious market outlook on its future performance, prompting investors to be aware of potential risks and opportunities.
See More
Earnings Season Approaches: Analysts Downgrade Financial Stocks' EPS Estimates
- Analyst Sentiment Decline: As earnings season approaches, analysts have broadly downgraded earnings expectations for financial companies, leading to a decline in EPS Revision Grades for several stocks, reflecting weakened market confidence in short-term performance.
- Earnings Downgrades: Unum (UNM) and Block (XYZ) received EPS Revision Grades of D and D, respectively, indicating a pessimistic outlook from investors regarding their profitability, which may adversely affect their stock performance.
- Large Financial Stocks Struggling: Lloyds Banking (LYG) and UBS Group AG (UBS) received Revision Grades of D- and D, suggesting significant pressure on these large financial institutions regarding earnings expectations, potentially prompting investors to reassess their investment value.
- Market Focus: Companies like HDFC Bank (HDB) and Mizuho Financial (MFG) also faced negative revisions, with EPS Revision Grades of F and F, respectively, indicating a substantial decline in market confidence in these financial stocks, which may impact their future financing and growth capabilities.
See More
Lloyds Banking Group Plans 2027 Rollout of Tokenized Deposits
- Blockchain Application Prospects: Lloyds Banking Group successfully piloted tokenized deposits in December 2025, with plans for a full rollout by the first half of 2027, a move that could fundamentally reshape financial services in the UK, enhancing customer experience and accelerating transaction processing.
- Mortgage Processing Innovation: CEO Charlie Nunn stated that combining tokenized deposits with artificial intelligence could reduce mortgage processing times from weeks to days while eliminating intermediaries, significantly improving efficiency and lowering costs.
- Asset Tokenization Growth: In July 2025, Lloyds completed a landmark transaction with Aberdeen Investments, using tokenized money market fund units as collateral for foreign exchange trades, marking a significant milestone for regulated digital assets and driving rapid growth in asset tokenization.
- Convergence of Traditional Finance and DeFi: Lloyds' blockchain strategy indicates that traditional financial institutions are taking Web3 technology seriously, and the planned rollout of tokenized deposits in 2027 could serve as a template for modernizing retail banking, enhancing both efficiency and compliance in financial services.
See More
