German broker Berenberg put a spoke through Standard Chartered PLC’s (LON:STAN) recovery wheel today, downgrading its rating for the emerging markets-focused lender to ‘hold’ from ‘buy.’
Berenberg also reduced its target price for Standard Chartered to 725p from 750p, leading the FTSE 100-listed firm’s shares to shed 0.6%, or 4.6p to 720.4p.
In a note to clients, the broker’s analysts said: “Standard Chartered has achieved a huge amount in a short period of time.
“Idiosyncratic balance sheet concerns have been reduced allowing the shares to re-rate to 0.7x TBV (tangible book value).”
But, they added: “To trade closer to 1x TBV is likely to need significant capital return to start and revenue growth to pick up, without a consequent pick-up in credit losses.
“However, this seems at least 12 months away, with little capital return to reward investors in the meantime. We downgrade to Hold as STAN therefore seems fair valued on that basis.”