Asia-focused banking giant Standard Chartered (LON:STAN) is overpriced currently for the investor, reckons heavyweight broker Deutsche.
The group reports first quarter numbers on August 3 and Deutsche reckons the focus being on emerging markets, the impact of the Brexit vote should be limited.
"...Instead we expect focus will return again to the revenue outlook – and Brexit is unlikely to be constructive," says Deutsche, however.
It repeats a 'sell' on the share and lowers the target to 474p from 480p.
"We think the long-term valuation of SC should be driven by 2018 returns and not further near-term improvements in credit quality or capital.
"We still struggle to see SC making close to cost of equity," says the broker, forecasting a 5.8% RoTE (return on tangible equity) in 2018 despite an 11% revenue increase by 2018 from current levels.
The firm's underperformance, it says, stretches back to the announcement of the Friends acquisition in November 2014, and this, along with falling yields and the Brexit vote have all conspired over the past 18 months.
It is a long term buying opportunity, on the broker's view, where the market is failing to factor in structural longterm growth potential driven by a leadership franchise.
It also cuts the rating to 'hold' from 'buy'.
On peer Shawbrook plc (LON:SHAW) the broker repeats an 'add' and lowers the target price to 215p from 385p.
Shares added 2.1% to 170p.