In a note to clients, JPMorgan’s analysts said they had raised their stance on the emerging-markets-focused firm to ‘overweight’ from ‘neutral’ as they “see potential for 2018-20 EPS to surprise positively against consensus.”
The analysts noted that the FTSE 100 listed shares have lagged the sector since February 2017 and in their view remain undervalued.
They said that “following a recent meeting with CEO Bill Winters, we came away constructive on the mid-to long-term recovery potential for the group (note).
“Separately, we revisit the group’s recovery path to 2021 and come to the conclusion that RoTE is likely to improve beyond 10.8% in 2021 with potential for upside risk from revenue growth.”
The analysts concluded: “In an environment where investors may seek revenue growth across the sector, we believe that StanChart is attractive and poised to deliver mid- to high-single-digit revenue growth which is as yet undiscounted.”
They also raised their target price for the stock to 900p from 800p, with the shares trading at 739.1p in mid morning trading, up 1.6% or 11.9p.