Standard Chartered (SCBFF – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Nick Lord from Morgan Stanley assigned a Buy rating on the stock and has a HK$89.40 price target.
Nick Lord has given his Buy rating due to a combination of factors that indicate a positive outlook for Standard Chartered. The financial results showed an underlying profit before tax that surpassed expectations, primarily driven by a lower impairment charge on loans. This performance was better than the Morgan Stanley estimate (MSe) and indicates robust cost control within the company. Additionally, the dividend per share (DPS) of 21 cents was a pleasant surprise, exceeding Morgan Stanley’s estimate of 14 cents, and the immediate commencement of a $1 billion share buyback program underscored the firm’s commitment to shareholder returns, although the buyback was less than the projected $2 billion for the following fiscal year.
Moreover, Lord’s optimism is bolstered by Standard Chartered’s forward guidance, which aligns with consensus estimates for 2024 but presents a more favorable outlook for 2025 and 2026. The bank’s guidance suggests a top-line increase of 5-7% per annum, with a targeted expense level below the consensus estimate by 2026. These projections are supported by the bank’s plan to save $1.5 billion in costs, although it will incur expenses to achieve these savings. The combination of positive surprise in dividend, a clear plan for capital return to shareholders, and promising growth guidance contributes to the Buy rating, reflecting both near-term performance and long-term strategic direction.
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Standard Chartered (SCBFF) Company Description:
Standard Chartered Plc engages in the provision of banking and financial services. It operates through the following segments: Corporate and Institutional Banking, Retail Banking, Commercial Banking, Private Banking, and Central and Other Items. The Corporate and Institutional Banking segment supports clients with transaction banking, corporate finance, financial markets, and borrowing needs. The Retail Banking segment offers digital banking services, such as deposits, payments, financing products and wealth management, as well as supporting business banking needs. The Commercial Banking segment consists of international financial solutions in areas such as trade finance, cash management, financial markets, and corporate finance. The Private Banking segment comprises of suite of investment, credit, and wealth planning solutions. The company was founded on November 18, 1969 and is headquartered in London, the United Kingdom.
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