Standard Chartered PLC (LON:STAN) saw its shares rally on Thursday following sharp falls in the previous session after the bluechip bank’s latest results disappointed, helped by some broadly supportive broker comment.
Deutsche Bank upgraded its rating for the FTSE 100-listed firm to ‘hold’ from ‘sell’ and raised its price target to 670p from 653p following the share price slide.
In a note to clients, the German bank’s analysts said although the emerging markets-focused lender saw a weaker third quarter and earnings estimates have fallen, they feel “the downside is now more limited”.
The analysts said: “Standard Chartered is still searching for an elusive step-change in revenue growth, and 3Q17 did not provide this. Though income is up YoY, it is down sequentially following a 1H17 which included gains.
“Meanwhile we see near-term headwinds on ‘asset-linked’ revenues, costs and capital from model changes in 2018.”
“However,” they added, “we were already US$200-400mln below consensus revenues forecasts for 2019/20 going into 3Q17 results, and consequently our downgrades are more limited.”
Added to Citi Focus List
Meanwhile Citigroup today added Standard Chartered’s shares to its Focus List Europe, replacing French lender BNP Paribas.
The US bank’s analysts said: “We believe the weakness post the STAN 3Q17 results presents an attractive buying opportunity.
“As highlighted in our deep-dive on the key drivers of our above-consensus revenues forecasts, we conclude that STAN can grow again and margins are improving.”
And analysts at the broker arm of global banking giant HSBC raised their price target for Standard Chartered shares to 630p from 620p while repeating a’ reduce’ rating on the stock as they still think “the valuation remains at odds with returns”.
In late morning trading, Standard Chartered shares were up 1.3%, or 8.8p at 713.8p.