The Lloyds (LSE:LLOY) share price hasn’t been a stellar performer of late. In fact, even after reporting staggering multi-billion-pound profits, the bank’s stock is still down almost 10% year-to-date.

Looking at Hargreaves Lansdown’s ‘Top of The Stocks’ list, Lloyds shares are among some of the most popular on the London Stock Exchange. It seems many investors are seeing this weak response as a buying opportunity.

Over the years, there have been numerous predictions that shares will eventually rise above the £1 threshold. So far, none of these forecasts have come to pass. However, given that Lloyds is one of the most important financial institutions in the country, this certainly doesn’t seem like an absurd possibility.

So when can investors expect the share price to hit the long-awaited 100p target? And could it happen in 2023?

The bull and bear case

Lloyds shares haven’t traded above the 100p threshold since the 2008 financial crisis. Despite most of the damage being undone over the last decade, the bank is still a shadow of its former self. And this isn’t too surprising.

Don’t forget that banks make money by lending capital to businesses and individuals. And with interest rates kept at almost zero since 2008, its profitability has been tough for lending institutions.

However, if low-interest rates were the problem, does that mean the future looks much brighter? After all, with the Bank of England hiking rates to combat inflation, lenders’ debt environment has drastically improved.

Yes and no. Sadly, investing is usually murky grey rather than clear black or white. Higher interest rates are undoubtedly beneficial to Lloyds. And the bank has already reported expanding profit margins that should help bolster the share price.

Unfortunately, the same can’t be said for its customers. Borrowers already over-leveraged are getting severely punished by the rate hikes, especially since they’ve climbed so quickly. And with debt becoming more expensive, demand for loans is starting to slow.

Combined, these negative factors are starting to emerge on Lloyds’ financials, with the loan book shrinking and the number of defaults rising.

Will the Lloyds share price hit £1 in 2023?

The negative impacts of rapid interest rate hikes appear manageable in their current form. Lloyds is still well capitalised, and most customers are keeping up with payments. That’s probably why some analysts have predicted that the stock could climb to 83p within the next 12 months.

However, there is growing concern that further rate hikes could eventually trigger a chain reaction that would likely send the Lloyds share price into a downward spiral. And it would explain why other analysts are far more pessimistic, anticipating the bank stock will remain flat.

Of the 21 institutional analysts following this stock, opinions seem to be split almost 50/50 on whether this business is a good buy today. But given that the most optimistic forecasts still lie short of the £1 threshold, I’m sceptical that investors will see this target hit in 2023.

However, providing the UK doesn’t fall into a new debt crisis, the improved lending environment for Lloyds suggests the share price has the potential to climb much higher in the long run.

The exact timeline of when this might happen remains a mystery. But, providing that investors’ concerns are unfounded, I wouldn’t be surprised to see upward momentum over the next few years.

The post When will the Lloyds share price reach £1 again? appeared first on The Motley Fool UK.

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Zaven Boyrazian 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.