I asked ChatGPT if I’ve left it too late to buy Lloyds shares. Here’s what it said…

I have long thought that Lloyds Banking Group (LSE:LLOY) shares are expensive. To be honest, that was my belief when they were changing hands for 70p, 80p, and 90p. But on each occasion, investors have clearly disagreed with me and now (8 December), the bankâs share price is heading towards the magical 100p.

So for a bit of fun, I turned to ChatGPT to see what Iâm missing. I asked: âIs it too late for me to buy Lloyds’ shares?â

What did it say?

Iâve always found the software to be incredibly polite. Indeed, it complemented me for asking a âreally good questionâ. But it said there wasnât a simple answer. It noted that the stock recently hit a 52-week high and described its 2025 half-year results as âsolidâ.

ChatGPT pointed out that the bear case centres on its share price relative to earnings being above âhistorical normsâ, concerns that its margin might be squeezed if the Bank of England continues to cut interest rates in 2026, and an over-dependence on a UK economy thatâs not really firing on all cylinders.

A more optimistic view is that the above-average dividend and share buybacks make it an attractive opportunity. If economic conditions improve then so should the bankâs earnings.

The software concluded that âI donât think youâve missed the chance completelyâ but itâs not a âslam-dunkâ either. It sounds like itâs sitting on the fence to me, which isnât very insightful.

Nothing new

Using a computer programme to decide whether to buy a stock is only a bit of fun. But itâs not a novel idea. Some investors â known as âchartistsâ â use software to create complicated graphs of share price movements and look for trends which, they believe, can help predict the future.

Personally, Iâm sceptical about the notion. Warren Buffett’s also dismissive. He once said: âI realised that technical analysis didn’t work when I turned the chart upside down and didn’t get a different answer.â

But chartism has its fans, although it can involve a lot of jargon. For example, Iâve seen one website which gives the following technical analysis for the Lloyds share price: ââ¦the Relative Strength Index and other oscillators like the Stochastic and the Moving Average Convergence Divergence have continued rising and moved to the overbought level“.

What does this mean? It goes on: “the most likely scenario is where the stock maintains the momentum and hits the resistance level at 100p and then pulls back as investors book profitsâ.

So what do human ‘experts’ think, those who use more conventional techniques like analysing discounted cash flows? Well, they seem to partly agree with the computers. The consensus of analysts is that the shares are around 4% undervalued. But with an average 12-month price target of 99.5p, they donât think the stockâs worth 100p. Despite this, most brokers are anticipating healthy growth in both earnings per share and the bank’s dividend between now and 2027.

On reflection

In my opinion, itâs better to rely on human judgement and instinct than a piece of software. And in doing this, I believe Lloyds’ shares are overvalued. When taking into account a blend of earnings, balance sheets, and dividend yields, I think there are other FTSE 100 banking stocks offering better value at the moment.

The post I asked ChatGPT if I’ve left it too late to buy Lloyds shares. Here’s what it said… appeared first on The Motley Fool UK.

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James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.