Lloyds Share News (LLOY)

UBS has adjusted its price target for Lloyds Banking Group to account for its ex-rights status.The Swiss broker said forecasts are largely unchanged since its last look at the end of November, which followed confirmation of the cash call and enhanced capital note (ECN) conversion terms.It keeps its Buy/Medium Risk rating and ex-rights 2010 price target of 69p, but makes adjustments to the balance sheet. "We see both medium-/long-term value based on improving fundamentals and the current valuation, as well as the possibility of a near-term rally," said UBS. "The heaviest selling of nil-paid rights seen at the start of the rights issue came from retail networks and has tailed-off, we believe.""The stock could bounce strongly once the rump placement completes on 14 December, or possibly sooner."It says the underlying margin and credit momentum is strong, so a moderate double-dip recession and/or more expensive debt refinancing would "delay but not derail the return to a valuation based on the long-term fundamentals". Even if this process takes five years and not the three the broker predicts "the stock is still attractive".